Consumer credit lending fell by 6% in 2010, according to latest figures from the Finance & Leasing Association.
December, traditionally a strong month for credit card borrowing, saw a year-on-year fall of 5%, reflecting consumers’ pre-Christmas reticence to spend on the high street. Store cards and store instalment credit fell by more than a quarter each.
Car finance was the only lending sector that increased year-on-year, showing a 9% jump compared with 2009.
Credit results are unsurprising
Which? credit expert Martyn Saville commented: ‘It’s not at all surprising that consumers are paying back credit, rather than applying for new credit cards and loans. With thousands of jobs at risk over the coming year, it makes sense for many families to reduce their exposure to debt.
‘It’s good news that borrowing has dropped significantly – most come with very high interest rates and far too often these cards are given without sufficient credit checks.
‘The only sector to show growth during 2010 was car finance – again, this is unsurprising. In a difficult consumer environment, car retailers need to entice customers into buying a new vehicle. Making car credit more readily available is one way to draw in customers.’
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