Sharp fall in credit card lending during August

September 29, 2006

By Peter Kenny

In a report released today by the Bank of England, it has been revealed that credit card borrowing during August 2006 fell by £0.3 billion.

The report ‘Lending to individuals August 2006’ showed that after the increase in credit card lending during July 2006 of £0.1 billion there has been a dramatic shift of £0.4 billion during August 2006.

There was an overall increase in consumer credit by £0.8 billion. Consumer credit covers personal loans and advances. This increase was lower than the increase in July, which stood at £1.1 billion.

 The reduction in credit card lending could be a result of the recent increase in credit card rates and fees.

During the past 6 months, many credit card companies have been steadily increasing their interest rates for both purchases and cash advances. Moneyfacts published research showing that as many as 19 credit card suppliers had increased their charges, since the decision by the OFT to force them to reduce their default fees to a maximum of £12.