Unsecured personal lending at record levels

by Gill Montia

Story link: Unsecured personal lending at record levels

Bank of England figures show a £300 million increase in debt on credit cards, overdrafts and personal loans, in September.

During the month outstanding consumer credit rose to £237.6 billion (compared with £217 billion in September 2007), setting a record high for unsecured personal lending since 1993, when records began.

Over the past year, financial experts and debt charities have warned that increasing numbers of consumers are stacking up debt on their credit cards to pay for essentials, such a their mortgage, rent and travel to work costs.

However, last month’s rise in unsecured lending was, in fact, the smallest since February 1994 and well below the average for the past six months, of around £1 billion.

Analysts suggest that Britons are finally taking action to curb spending as the economic outlook deteriorates.

In addition, new credit of any kind is now in short supply as banks and credit card providers reign in their lending and become more interested in customers’ abilities to repay their debts.