Credit Card Borrowing Seems To Slow

UK Credit card borrowing has slowed down for the second time this year as consumers are becoming more wary of what they are spending and borrowing. In contrast, the amount of applications for loans and overdrafts has risen.

Credit card borrowing fell by 146 million pounds in the month of August according to the British Bankers’ Association, and it wasn’t the first time this year as April also saw a reduction in the amount of credit card debt by 40 million pounds. April’s reduced borrowing on credit cards was the first in 12 years.

Consumers are being more cautious in what they are spending and the increase in loans and overdrafts suggest that people are looking to consolidate all their debts for one low interest loan repayment.

On one hand it is good news that people are starting to take responsibility for their finances, but not everyone is leading the way where perfect finances are concerned. A report out recently discovered that 27 million people in the UK are leaving their bills unopened and are content to be blissfully unaware of the amount of credit they have accumulated and the enormity of the responsibility of sorting it out.

People aged between 25 and 34 are the main culprits in postponing their financial responsibilities. Scotland and Wales are the countries where you are more likely to see people ignoring their finances with around 35% of people opting not to deal with their debt straight away. The most proficient people with their finances are to be found in the south-east.

The best way to deal with your finances is to try and sort them out as soon as possible so you have more free time to enjoy life and not waste it by worrying and being stressed about money.

Barclaycard are launching a new initiative to entice new customers to purchase their credit cards. The scheme offers customers who pay off a higher amount on their balances a lower percentage on repayments. The scheme is only in its trial stages and will be offered to customers later in the year.

The ‘Repayment Rewards’ scheme offers those who pay off more than 10% of their balance an interest rate of 9.9%, customers who pay between 5.05% and 9.99% will have to pay an interest rate of 12.9% but customers who only pay the minimum amount on their balance which is 2.5% will be charged an interest rate of 16.9%. The scheme is set up not only to offer the consumer credit but to encourage sensible borrowing.

This style of credit card is the first to be introduced in the UK but numerous different varieties of the credit card scheme is available in the US.