Consumers to reduce borrowing, says report

Those intending to reduce the amount owed on credit cards in the next six months outnumber those who plan to borrow more, new research has found.

According to Alliance & Leicester, credit card borrowing has fallen every month from February until August this year, reaching its lowest level in two years.

Consequently, people looking for the best credit card offer on the current market could benefit by managing their money in keeping with the trend of borrowing less.

Commenting on this decline, Chris Rhodes, managing director of Alliance & Leicester Retail Banking, said that in context, “the economy is performing well and employment is at an historic high”.

He suggested that although borrowing has decreased, it is linked to a “cultural shift” and said that this year “has been a turning point for the UK consumer”.

However, while borrowing may have declined throughout the year, research this week found that the average amount spent by consumers on credit cards over Christmas is expected to reach £1,270 – an increase of 35 per cent from 2005.

© Adfero Ltd

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