Credit card lending holds up over Christmas
25 February 2010 14:28:48
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| Long-term credit payments are avoided by consumers. |
According to research conducted by the Finance & Leasing Association (FLA), new consumer lending by FLA members in December 2009 was down by 15% on levels seen in 2008.
However, the figures show that, in contrast to direct unsecured loans and second mortgages, credit card lending held up well, falling by just 4% when compared with the previous year.
This is because of heightened concern over the economic recovery and unemployment, the FLA believes, with consumers increasingly reluctant to commit themselves to long-term credit repayments.
"The High Street has benefited from FLA members providing credit to customers, whether through credit cards, store cards or store instalment credit," commented Fiona Hoyle, the association's head of finance.
"Customers are using these products because they are flexible and allow consumers to spread payments for essential goods and keep them at levels that are within their budgets."
Earlier this month, the FLA explained that the higher rates being charged by credit card providers reflect the greater risk of borrowing, with credit card debt write-offs having doubled in the third quarter of 2009.
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