Are consumers turning away from credit?
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The amount of credit given to consumers fell in 2010, with only car finance increasing last year.
Credit card spending fell by 7% in 2010, while the value of unsecured loans approved by lenders dropped by almost a quarter (24%), according to figures from the Finance & Leasing Association (FLA).
Spending on store cards also fell last year, with shoppers reducing their use of the products by 7% compared with 2009.
The only area of consumer credit that expanded last year was the car finance market.
The area was buoyant last year, growing by 9%, helping to inflate the overall figures. Without the positive figures in the car finance market, consumer credit would have fallen by 10% during 2010.
In December – traditionally a month when more customers use credit for some of their Christmas spending – there was a fall in credit sales. Credit card spending was down by 5%, whilst store cards and store instalment credit fell by more than a quarter each.
The figures reflect a difficult month on the Hi...
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