Other methods of finance proving more
popular than credit cards

Although the levels of consumer credit in the UK have been at the centre of concern for some time more and more people seeking financial assistance in the form of IVAs and even bankruptcies. It seems that many people are wising up to the extortionate costs that can be associated with credit card spending and are instead looking at other means of finance that could prove more cost effective and affordable over the long term.

Over recent months figures have shown that fewer people are relying on their credit cards for funding purchases, and some think that this may be a sign that UK consumers are finally taking control and trying to get a tighter reign on their finances.

However, there are also experts that state that, although credit card spending is indeed down, it may not be an indication of the UK consumer’s desire to control his or her finances. It may actually be the fact that many consumers have now found alternative methods of borrowing and therefore do not have to rely on their credit cards as much. Personal loan and overdrafts have proven popular recently, and many people that have used these forms of finance may otherwise have relied on credit card spending.

According to one expert: 'People are looking more closely at their borrowing decisions. Rising house prices means there is equity available to be unlocked by homeowners. People are choosing that method of borrowing rather than taking out a personal loan or putting money on a credit card, which might have high monthly costs.

However, another stated: 'The decrease in credit card borrowing simply indicates that people are borrowing in different ways. The increase in loans and overdraft borrowing reflects the evidence from Citizens Advice bureaux that debt enquiries continue to rise in 2007 and will exceed the 1.4m debt enquires we dealt with in the last financial year.

Source : http://www.selectloans.co.uk