Credit Cards UK

Credit Card Debt Falls

The British consumer is beginning at last to be a little more cautious when it comes to splashing the cash and putting them further into debt.

Recent figures have suggested that there has been a drop in credit card debt for the first time in over a decade, as people begin to be a bit savvier, when it comes to dealing with the debt that they have.

The figures released, have seen the month of April as the turning point in consumer spending, as the overall credit card debt fell by £40 million and for the first time since May 1994, the credit card market has seen the consumer pay back more than they borrowed, as the consumer looks now to save rather than be credit card happy.

This could be on the back of the fall in mortgage lending, as the house market has began to stall in recent months, so it is only to be expected that those with a high level of debt, what with mortgage repayments and credit card balances that were maybe starting to get out of control, that people were beginning to be more cautious with their household cash flow.

Some other factors in the decline of the debt owed in April, could be put down to the fact that this year Easter fell in March, so with these figures adjusted seasonally, then any spending done in April, will not show on credit card statements until May and with the amount of consumers applying for loans and overdrafts also slowing then these are also contributing factors, to show that the consumer is becoming more debt conscious.

The rise of the housing market in the last few years obviously gave people a false sense of wealth and with the market slowing down recently, people are beginning to see their finances in a different light and are starting to adjust their finances to cope with a down trend in the housing market or a recession that could be just around the corner.

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