British consumers are increasingly turning to secured lending arrangements in an effort to clear debt, it has been suggested.
According to the assessment of personal finance website Moneyextra.com, many UK consumers are looking to reduce their credit card debts and are taking on long-term personal loans to do so.
The assertion came after the website’s own research found that the level of credit card debt in January 2008 was “sharply down” on the same figure for the same month in each of the two previous years.
Furthermore, experts at Moneyextra.com are convinced that the difficulty in switching credit card providers has played a part in increasing the popularity of secured lending deals.
“Some consumers will be paying down their credit cards but others have been rescheduling expensive high-interest rate short-term credit card debt onto longer, structured loan products with lower interest rates,” said Robin Amlot from Moneyextra.com.
A report from Moneyfacts.co.uk claimed last week that credit card users have been facing higher balance transfer fees in recent months.