December Debt Reduced
February 22, 2009
The British Bankers Association, the BBA, announced figures that showed that consumers in December had paid back more than was spent on credit cards, the figure showing as £ 0.4 billion of unsecured borrowing on credit cards being repaid and all this at a time when retailers were bring out heavy discounts in a bid to entice consumers.
The BBA advised that over the month £ 218 million had been repaid to credit cards while £ 135 million had been repaid to overdrafts and loans. The overall spending on credit for the month was down by 8.9% from the previous year. Along with this the number of purchases on credit cards also fell to £ 98.2 million, down by 5.9% on the previous year.
With the current climate it seems that consumers had turned away from borrowing and more toward saving, which showed with £ 4 billion being paid into banks during the month.
Chief UK Economist at HIS Global, Howard Archer, said “Going forward, consumer borrowing will be limited by ongoing very tight lending conditions, while many people are likely to be increasingly keen to rein in their borrowing.”
“Rising debt levels, historically low household savings rates, plunging house prices and sharply weakened equity markets mean that there is a pressing need for many consumers to improve their finances. Furthermore, we suspect that very serious concerns over jobs and the economic outlook will cause people to try to save more, if they can.”
- Do Not Get Rid Of Your Credit Cards
- Cash Back Credit Card Usage Increases
- Cap The Credit Card Charges
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