Consumers 'still reliant upon credit cards'

Many consumers are still as reliant upon credit cards and borrowing money as they have been in the past, it has been claimed.

Commenting after the Bank of England reported that lending to consumers increased by £0.7 billion last month, Credit Action director Chris Tapp said there is still great demand for borrowing.

He said: "A lot of people are reliant upon being able to borrow on their credit cards to smooth out peaks and troughs in their income, and in many unfortunate situations they rely on cards simply to [cover] essential living costs."

Mr Tapp said the recession had not put an end to "Britain's love affair with the credit card", with many consumers using existing lines of credit on cards and also seeking new ones.

The UK is still in a situation where financial institutions are restricting how much and who they will lend to, but demand does exist for when they make finance more readily available again, he said.

Andrew Goodsell, executive chairman of the Saga Group, recently offered free debt advice, urging consumers to switch credit card provider to limit costs.

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2009-11-02 12:30:44 © Moneyextra.com