Decline in personal loans, whilst credit card debt continues to grow, seems to point to the fact that savvy Brits know that they can borrow for considerably less by using a 0% balance transfer card.
London (PRWEB UK) 24 May 2013
Figures released in the UK today by the British Bankers Association (BBA) show that Brits are continuing to clear their personal debt whilst savings are on the increase.
The BBA published report, “April 2013 figures for the high street banks”, is based on data from the MBBG (main high street banking groups) whose participants represent around 66% of the UK mortgage market, 60% of new credit card debt and 50% of all consumer credit and shows that personal deposits rose by 5.5% over the year to April.
The report also shows that levels of outstanding unsecured borrowing contracted by 1.3% over the past year. However, that decline masks very different trends between different types of unsecured debt. Borrowing on credit cards actually grew by 5.8% annually, whilst unsecured personal loan debt contracted by 6.7%.
David Dooks, BBA statistics director, commented on the figures:
“Low consumer confidence is depressing demand for new borrowing and consumers are continuing to save, with deposits rising by 5.5% over the year to April.”
A spokesperson compareandsave.com added:
“These figures seem to point to the fact that UK households are continuing to realign their budgets in the face of continued government cuts, increased taxes and a stagnant economy.
Savings are up, which is natural given the uncertainty surrounding the wider economy.
What is perhaps the most interesting for us is the way the nature of unsecured debt is changing. The decline in personal loans, whilst credit card debt continues to grow, seems to point to the fact that savvy Brits understand that they can borrow for considerably less by using a 0% balance transfer card. In fact, given that competition within the UK credit card market has driven a number of issuers to offer teaser rates of over 25, there has potentially never been a better time to get a credit card.
compareandsave.com is one of the UK’s leading personal finance comparison websites. Based in Colchester, Essex, compareandsave.com has been helping UK consumers get a better deal on credit cards, saving, loans and more for over five years.