There was a seven per cent rise in consumer credit lending from Finance and Leasing Association (FLA) members in the second quarter of this year, comp…
There was a seven per cent rise in consumer credit lending from Finance and Leasing Association (FLA) members in the second quarter of this year, compared with the same period in 2011.
FLA figures showed that store instalment credit saw the greatest increase in use, up 25 per cent, while there was a 21 per cent rise in car finance and second mortgages were up 12 per cent.
However, the level of credit card debt will be little changed, as the figure for credit cards and personal loans only increased by one per cent.
Furthermore, the figure for store cards continued its downward trend of recent years, plunging by 16 per cent.
Head of consumer finance at the FLA Fiona Hoyle said: "June delivered the sixth consecutive month of growth in the total amount of consumer credit provided by FLA members."
However, she suggested, debt consolidation may be a motivation for the latest trends, remarking: "Growth in car finance and store instalment credit has been helped by the good deals currently on offer via retailers and car dealers. Consumers are taking advantage of these to spread payments into manageable monthly sums."
The FLA lent £52.1 billion of consumer credit in 2011, representing a third of all unsecured lending in the UK.
For this reason, the figures may be an accurate barometer of the wider consumer credit situation.
The number of consumers who could benefit from taking action to lower their debt repayment burdens runs into millions, according to chief executive of the Money Advice Trust Joanna Elson.
Commenting after the recent release of official insolvency figures revealing the number declaring themselves bankrupt or taking out individual voluntary arrangements continued its downward trend in the second quarter of this year, she said these were "merely the tip of the iceberg".
As many as ten million people face a "constant struggle" to cope with their debts, she stated.
Posted by Paul Thacker