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Consumers considering borrowing again

Consumers considering borrowing again

Category: Loans

Updated: 09/05/2012
First Published: 09/05/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers are making a tentative return to credit cards, loans, store instalment cards and car finance.

There was a gradual improvement in the take-up of consumer finance during the first three months of the year, according to the Finance & Leasing Association (FLA).

Total consumer finance provided by FLA members grew by 9% in March, compared with March 2011.

The car finance market has consistently proven to be strong, even during the downturn, and March was no exception, with credit increasing by more than a fifth (22%) compared with the same month last year.

In total, FLA members lent £5.5 billion to consumers in March, with £2.8 billion lent through credit cards and personal loans – a 2% rise on March 2011.

Borrowing on store instalment cards – used to pay down store credit each month – increased by 12% in the month.

Standard store cards were the one area that people appear to be turning their backs on, as borrowing fell to just £116 million – a 12% annual decline.

"Our figures show a slight rise in most markets, which suggests that consumer confidence is showing signs of a tentative return," said Fiona Hoyle, head of consumer finance at the FLA.

"But many consumers continue to be cautious, reinforcing the need for the Government to make sure that their proposed changes to consumer credit regulation do not limit the supply of affordable, responsibly-provided credit."

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