Consumers are using less consumer credit in the face of rising interest rates which is pushing the cost of borrowing up, it has been claimed.
According to the Finance and Leasing Association (FLA), uptake and use of store finance and credit cards has declined in recent months.
FLA spokeswoman Helen Saxon said: “The statistics are actually telling us that consumer credit is getting less popular.”
She added: “There is less money around because people are putting more towards their mortgage. Itís natural to tighten your belt in these cases and spend less on credit cards.”
The FLA is a trade body representing the asset, consumer and motor finance sector in the UK.
Interest rates have been raised four times in the past 12 months and now stand at 5.5 per cent, with many analysts predicting a further rate rise in July.
In related news, students have been advised to take full advantage of a loan from the Student Loans Company by the Consumer Credit Counselling Service, which said it represents the cheapest form of lending available to most students.
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