Spending on credit cards down 7%

28 July 2010

The latest consumer credit figures from the Finance & Leasing Association (FLA) have revealed that spending on `short-term credit arrangements`, such as credit cards, fell by 7% in the 12 months to May, compared with the previous year, headlinemoney.co.uk reports.

Overall, consumers used 8% less credit in the year running to May 2010 than in the 12-month period to May 2009.

The statistics showed that there was a much more significant fall in larger financial commitments than credit cards, like second-charge mortgages and unsecured loans, which dropped by 67% and 45% respectively over the same period of time - a trend that started with the credit crunch.

The fall in spending may suggest that consumers are waiting to see what the future holds for the wider economy before making any long-term credit commitments.

Head of Consumer Finance at the FLA, Fiona Hoyle, said: "In uncertain economic times, consumers want to take even more control over their financial commitments. This is reflected in a more cautious approach to consumer credit spending."

Tags: credit cards, lending, loans, borrowing

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