Store card spending falls by 25%
Figures from the Finance & Leasing Association (FLA) show that consumers are continuing to exercise caution in spending.
Store card and store instalment credit business was down by 25 and 11 per cent respectively in November and credit card spending flat when compared with November 2009.
Personal unsecured loans rose by 34% in November, but this was compared to the very low level of credit granted in November 2009.
2011 will see significant changes to the way the credit industry operates. The Consumer Credit Directive will be implemented by 1 February, giving customers much clearer information from the outset about the cost of credit and placing stricter requirements on firms when lending.
Credit and store and credit card providers have also put in place new measures to help customers manage their accounts more effectively – including the right to reject increases in credit limits and interest rates. These changes will give consumers additional protection, but it remains to be seen how they will affect access to credit on the high street.
Fiona Hoyle, FLA Head of Consumer Finance, said,”These figures send a clear message to the Government about the challenges to be faced when considering further regulatory changes in the consumer credit sector while ensuring that the UK maintains a competitive market with real consumer choice. This year credit firms will implement the Consumer Credit Directive, which will offer even more protection to consumers and from 1 January store and credit card providers put in place a raft of new measures to help borrowers to use their cards sensibly. Against a backdrop of contracting markets, the Government must
consider carefully the impact on the markets of any further changes to the credit regime.”
