Credit cards remain a popular spending method but the amount consumers are borrowing is “levelling off”, according to Credit Action.
Chris Tapp, director of the money education charity, stated that many Brits continue to hold multiple credit cards but that with banks tightening their lending criteria, credit is no longer as widely available.
Speaking to the BBC, Hector Sants of the Financial Services Authority recently explained that the reason behind banks’ tightened lending criteria is that it is becoming less lucrative for them to sell on loans to investors.
As a result, the cost of loans and mortgages is increasing and they are restricting who they lend credit to.
Mr Tapp commented how Egg online bank had to cancel a “substantial” number of credit cards earlier on in the year.
“Credit cards are Ö still a very popular way for people to borrow and spend their money,” he said. “But in terms of dramatic growth, we have seen that rate slowing in the past 12 months.
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