Credit Card Borrowing drops for homeowners

13/02/2007

The latest borrowing monitor from Alliance & Leicester has highlighted that credit card borrowing is on the decline for mortgage households due to the fall in attraction of unsecured debt. The monthly monitor looks at what debts consumers have and how much its cost them to meet their loan requirements in relation to their household income.

Current research indicates that people in the UK are at acceptable levels of debt, however things could change for the worse should the Bank of England raise interest rates again.

In contrast, whilst debt figures are on the decline, mortgage lending figures have grown at a steady pace. According to Chris Rhodes, director of retail banking at Alliance & Leicester, said: "Consumers have shown an unprecedented appetite to reduce their unsecured borrowing, while their incomes have continued to grow and interest costs on their unsecured borrowings have fallen.

Figures supporting this have shown that since July 2006 unsecured borrowings for homeowners with mortgages has dropped by an average of £197.00 however, those without mortgages have increased their spending on credit card and personal loans debt by a typical £98.