Instalment credit sees sharp jump
The amount borrowed by shoppers through instalment credit has risen sharply and bucking the trend for other forms of credit, according to the latest figures.
There was an increase of 17 per cent during December compared to the same month in 2008 as consumers sought to take advantage of the VAT rate before the hike in the new year. The total borrowed was £260 million, according to the Finance and Leasing Association.
The report says that consumers borrowed money to make both big purchases and using instalment credit to pay for smaller items such as white and electrical goods, typically under £700.
Credit card borrowing was down 4 per cent in December, but held up better than many other types of borrowing. The FLA reported that overall consumer credit in December 2009 was a whole 15 per cent lower than in December 2008.