New borrowing through loans, credit cards, and overdrafts outstripped the level of repayments by UK consumers in January for the first time in seven months, according to the Bank of England.
The Bank revealed that demand for unsecured consumer credit rose by £52m during December, driven largely by borrowing on credit cards .
From June 2009 to November, repayments outstripped new borrowing as an increasing number of consumers focused on paying off their debts rather than saving, with interest rates at a record low.
However, strong demand for unsecured credit, particularly credit cards, in December led to a change in this trend.
According to the Bank of England data, while the demand for personal loans and overdrafts remained low (repayments outstripped new borrowing by £143m) during the month, borrowing on credit cards soared by £195m.
Andrew Goodwin, of professional services firm Ernst and Young, said: "The small increase in consumer credit is likely to be connected to consumers bringing forward purchases to avoid the VAT increase and a relapse is likely next month."
"The household sector is continuing to deleverage and we expect consumers to provide little support to the recovery as it develops this year."
Credit Card Borrowing On The Rise
Tue, 02 Feb 2010
Recommended links
Debt advice portalFree debt help enquiry
Types of debt
Credit card debt
Bankruptcy and debt
Debt advice and guidance
Debt stress support
Credit card repayment calculator
Practical debt test
Bank Write-Offs For Bad Credit Card Debts Soaring
Credit Card Users Ignoring Debts
Brits Spending Less On Credit Cards
Over 50s At Higher Risk Of Credit Card Debt
Consumers Spending Less On Credit Cards To Reduce Debts
Brits Keeping Credit Cards Secret
| news |
|---|
| Shopaholic Brits A Staggering GBP13bn In Debt - Fri, 27 Aug 2010 |
| Increasing Popularity Of Payday Loans Causing Debt Concerns - Fri, 20 Aug 2010 |
| Brits Encouraged To Be More Open About Debt Problems - Tue, 10 Aug 2010 |
| More News |
