Brits only spending what they can afford

UK credit card holders are only spending what they can afford to pay off at the end of the month, according to statistics released this week.

APACS figures show that gross credit card lending for the first quarter of 2009 was £30.3 billion, whilst cardholders repaid £29.6 billion.

Credit rating provider Equifax believes this is a sign that British consumers are focusing on paying off debts in case they are made redundant.

“Maybe there is an expectation that their job may not be as secure as it was and therefore people don’t want to be caught out with no job and [high] borrowing still,” said Neil Munroe, Equifax’s external affairs director.

Munroe also said that debt worries could be the reason for the rising popularity of debit cards as a payment method.

“People are moving to using what they know they have rather than borrowing on the basis that they have to pay it back later,” Munroe said.

According to Credit Action, total UK personal debt at the end of March 2009 stood at £1,459 billion.

Discuss this in the Finance Markets forums

Story link: Brits only spending what they can afford