Credit card borrowing downPeople are putting less money on plastic
19 January 2007
Consumers borrowed less on credit cards for the first time in at least 14 years, figures for 2006 revealed today.
Credit card lending fell by £1.8 billion last year - the first annual fall since the compilation of lending data started in 1993, the British Bankers' Association (BBA) said.
The figures suggest consumers are paying off their credit card debt and putting less money on plastic.
But the BBA said borrowers were instead turning to mortgage lending for finance.
BBA Director of Statistics David Dooks said consumers were feeling the squeeze, after a series of interest rate rises, increases in energy bills and fuel, as well as rises in transport costs.
He said: ‘People are looking more closely at their borrowing decisions. Rising house prices means there is equity available to be unlocked by homeowners.
‘People are choosing that method of borrowing rather than taking out a personal loan or putting money on a credit card, which might have high monthly costs.’
The BBA added that there was a decrease in the number of 0 per cent interest rate credit card deals available last year, which may also explain the decline in credit card borrowing.
The BBA figures take into account lending from Britain's major banks, including Barclays Bank, Halifax, Lloyds TSB and HSBC.
© The Press Association, All rights reserved.