UK Debt levels continue to rise in 2007

The UK is experiencing rising levels of debt. However evidence suggest the pattern of debt is shifting from credit cards to personal loans. The level of mortgaging lending continues to rise and remains by far the biggest type of borrowing. The increased value of houses has enabled more secure loans to be taken out against the value of the house.

Credit card companies have become increasingly picky about which customers to give cards to. This has reduced the number of bad debtors, it has also reduced the number of people with credit cards. The number has falled from over 11 million to 9.8 millionPayment default was a reason for Barclaycard reporting significant falls in profit, though it claims the worse is now over.

According to Euromonitor International, the average amount spent on credit cards fell for the first time ever. In 2005, the typical spend per person was £1,978 - but in 2006, it was £1,900.

Credit cards were traditionally seen as short term loans and it suggests people are getting wise to the high APR charged by credit card companies

See also: WHy debt has increased so much in the UK

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