Borrowers look to pay off credit card balances
Bank charges: Borrowers look to pay off credit card balances
Repayment of credit card bills more than offset spending during February 2012, as borrowers expressed caution over taking on new credit and looked to avoid credit card charges.
According to latest figures from the British Bankers' Association (BBA) £7 billion was spent on credit cards during the month, a figure broadly in line with the average seen over the past six months ppi
However, this was exceeded by borrowers paying off outstanding balances and the body noted demand for other forms of unsecured borrowing, such as loans and overdrafts, remained weak.
"Repayment of this unsecured borrowing continues to outweigh new lending. This behaviour has resulted in a constant contraction of borrowing levels over the past three years," the BBA said.
Statistics director David Dooks added the "difficult economic times" mean both households and businesses are exercising caution with regards to their finances.
The BBA, which represents over 200 banks from 60 countries, recently welcomed the launch of the National Loan Guarantee Scheme, saying it will help economic growth in the UK.