Mortgages push ahead of Credit Cards for finance

19/01/2007

According to the British Banker’s Association (BBA) credit card uses are utlising their card less frequently and instead are turning towards their mortgage for finance.

UK credit card spending figures for 2006 had dropped for the first time since 1993 by £1.8bn. Mortgage equity release is becoming more and more popular for equity release an substitute to lending money on a credit card. Another reason for this preference could be as a result of reduction of zero percent credit cards on the market

Figures for mortgage lending in 2005 have shown that a increase by £66.8bn.

The BBA’s Director of Statistics, David Dooks said "Rising house prices mean there is equity available to be unlocked by homeowners". He also added that credit cards have high monthly costs and this has drawn borrowers to the possibility of equity release.

Data supplied from the major UK banks is by the BBA for its statistical reports.