Consumer Borrowing On Personal Loans And Credit Cards Slows Down
Despite the credit crunch and economic slow down, last year saw consumer borrowing on personal loans and credit cards continue to increase, with an annual increase of around 8 per cent over the course of the year.
But as we enter the final quarter of 2009, it would appear that consumer’s appetites for borrowing money through loans and credit cards has slowed down significantly over the course of the year, with the level of borrowing starting to level out, as both borrowers as well as banks, and other loan and credit card companies are taking a more cautious approach towards individual debt levels.
The report comes from Pricewaterhouse Coopers, who have said that this year has been a turning point for consumer credit, largely due to the fact that personal loans and credit cards have become harder to obtain.
Total borrowing in the UK seems to have levelled off at approximately £1.5 trillion and unsecured borrowing on personal loans and credit cards has remained at around £230 million. The biggest drop in borrowing has been on credit cards, partly due to individuals taking out debt consolidation loans, but largely due to the fact that credit card companies have become much stricter on offering cards to individuals and raising credit limits, following the fact that credit card companies have been forced to write of around £3.2 million worth of bad debts over the course of the year.
A spokesman for Pricewaterhouse Coopers said “The recent announcement by one major issuer that they would not generally seek to acquire new credit card customers without those same customers also holding a current account with them is in stark contrast to the time when credit card issuers accounted for one in every four pieces of junk mail that made it through our letterboxes.”
