Credit card lending increases once again

October 29, 2007

This September studies have shown that the amount of money being lent on UK credit cards increased by one hundred million pounds. The sudden increase in borrowing on credit cards is no doubt linked to the fact that there is only 10 weeks left until Christmas.

Christmas is a particularly lucrative period for credit card lenders and this year is set to be no different. With new game consoles such as the Xbox 360 and the PS3, consumers are set to spend thousands of pounds on gifts this Christmas. Not many people can afford the cost of Christmas on their salaries and so they turn to credit cards in order to help them through it.

The new rise in credit card lending could be down to the fact that mortgage lending has dropped over the last six months. Higher house prices and mortgage costs have caused people to think twice about getting onto the property ladder and therefore they have had more money to spend on credit card repayments. So, more people have decided to apply for credit cards, rather than a mortgage.

However despite this recent rise in credit card borrowing, experts are predicting that the levels will decrease in the next month or two. This is because although there has been a rise recently, the figures are still not as high as they were last year. They are expected to fall once again now and that just highlights the fact that lending is slowing down.

Overall borrowing on a credit card is not as popular today as it was a year ago. People are slowly starting to wake up to the true cost of credit cards and the debt that no doubt comes with it. So whilst there has been a slight rise in credit card borrowing recently, it is not expected to continue.