Loans and Overdrafts Weren’t On Your Christmas Lists
Consumers across the UK are continuing to pay down their debts, despite High Street stores offering huge discounts in order to tempt shoppers to part with their cash. At least, this is according to figures produced by the British Bankers’ Association (BBA).
November saw an increase in retail sales and credit card borrowing – although this is mainly as a result of the interest due on existing debts – however, there was very little demand being shown toward loans and overdrafts, established the BBA.
This is also the same for mortgage approvals, which also saw a fall in the figures provided by the BBA.
The number of approvals for house purchases fell to 34,738 in November from 35,196 the month before. However, the figure was higher than the figure of 29,875 seen at the same point last year.
However, the amount of consumer credit taken out fell by £200m in November compared with the month before and the amount of money saved by consumers rose by £2.1bn over the same period to a total of £645.3bn.
Statistics director for the BBA, David Dooks, gave his views, saying “Until there are clear signs of improvement in the economy and stability on the international front, household and businesses lack the confidence needed to seek credit for spending and investment.
He continued “Stocks of bank lending therefore continue to be driven down, as repayments dominate over the absence of any material rise in borrowing demand.”
The value of lending to businesses also fell by £0.7bn as firms across the board relied more on their cash flow to fund operations.
In related news, new government plans are set to completely eradicate the “excessive” fees for using debit or credit cards when purchasing items – such as travel or cinema tickets – by the end of 2012.
This move has been announced amid complaints that booking agencies, airlines and councils have been found to be imposing excessive charges when consumers choose to pay by card.
Despite these charges being removed, the firms will still be allowed to levy a “small charge” in order to cover the costs associated with payment processing.
It is essential to find the right credit card for you and the way you want to spend. If you are a frequent traveler, it may be a good idea to have a look in to airmiles credit cards. Have a look at our tables and compare credit cards in the New Year to see if you could save on your credit card spending!