Credit card splurge soars in December
As the economy continues to recover, the Bank’s survey of banks and building societies found that demand for these types of credit is expected to increase further in the next three months.
The report found that in the three months to early December, demand from households for both credit cards and personal loans saw its biggest upswing since the quarterly Credit Conditions Survey started in spring 2007.
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Hide AdLenders reported that their changing appetite for risk helped to drive an increased availability of these types of credit. They said they have embarked on marketing campaigns which have been successful in drumming up business, they have loosened their credit scoring criteria and the proportion of applications being approved has increased.
The study follows a report from the British Bankers’ Association (BBA) which said last month that the annual growth in consumer borrowing using credit cards, overdrafts and personal loans has recently been increasing at the fastest rate seen in six years.
The BBA put the increase down to both an easier borrowing climate and improving household finances.
The Bank’s findings also suggest that the ultra-low rates being offered on mortgages are likely to continue in the coming months - although people with very low deposits saved could have a tougher time securing a deal.
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Hide AdWhile mortgage availability has seen a slight increase generally in the last few months, lenders have become less willing to hand out mortgages to people with deposits of less than 10 per cent, the report found.