Unemployment fears reduce `debt-fuelled` spending

22 July 2009

According to figures from the Finance & Leasing Association (FLA), consumers are `shunning debt-fuelled spending sprees amid fears over unemployment`, the Press Association reports.

The figures show that consumer credit levels stood at £4.35bn in May - 18% lower than they were in the same month last year.

Despite the fall in consumer credit levels, the hire purchase market, which allows individuals to purchase household items costing (on average) below £1,000 (sofas, televisions, etc.), increased in May - with lending levels rising 7% to £209mn.

Meanwhile, lending on credit cards fell 11% year on year to £2.64bn, while secured loans fell to just £39mn for the month.

A spokesperson for debt management company Gregory Pennington commented: "Credit can be a useful way of financing essential purchases - but it can be tempting to buy things we may not necessarily need, and many people end up with debt problems by doing this.

"Anyone considering making a big purchase using any form of credit should consider their options carefully before doing so. A professional debt adviser may be able to suggest more cost-effective ways of making the purchase."

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Gregory Pennington offer debt management plans as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.

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