Lack of credit sees switching rates fall

The lack of credit availability has seen the rate of financial services switching activity fall over the past 12 months, according to a recent study.

Figures from MoneyExpert.com have revealed that there were 17 per cent fewer instances of financial service switching in the first three months of 2008 compared with the same period in 2007.

As millions of consumers have struggled to become debt free, lenders have trimmed the number of deals they offer and borrowers have had little room for debt management maneuvers since the start of the credit crunch.

In addition, the rates of interest being offered by service providers have become less attractive in recent months and so fewer people have been motivated to switch, MoneyExpert.com reports.

Reflecting on the findings, the company’s founder Sean Gardner said: “The credit crunch is having an effect on people’s ability to move as lenders increase rates and prices and withdraw products.”

Last week, Emma Walkley, current account manager at Alliance & Leicester, advised UK consumers to be as pragmatic as possible as they look to softlink=”clear_debt”>clear debt.