Many consumers try and stay away from debt

Although the high levels of consumer debt in the UK have been of great concern for some time, recent research has shown that the majority of consumers are trying to steer clear of debt and are only borrowing money when it is absolutely necessary. Of course, there is a minority of consumers that are laden with debt, contributing to the sky high consumer debt levels and bad debt levels in the UK. However, according to reports people in the UK seem to be getting savvier about borrowing money, and will go to extra lengths to try and stay out of debt as much as possible.

The Alliance and Leicester recently carried out a study that showed the majority of consumers were avoiding debt as much as possible. The figures from the survey indicated that over sixty percent of consumers in the UK only took out finance when necessary, and tried to stay away from getting into debt. This means that nearly two thirds of consumers in the UK are wise with regards to their borrowing by not taking out finance without good reason.

Another aspect of the research showed that many of those that did take out finance, however, were not giving enough thought to where they were borrowing from and how much they were repaying. Rather than finding a good deal on a credit card, many borrowers stated that they found it more convenient to take out a store card despite the extortionate rates of interest charged. The same applied with car finance, where many stated that they went for the convenience of car dealership finance rather than shopping around for a low cost loan. One Alliance and Leicester spokesperson said that is was somewhat worrying that borrowers were putting convenience over value for money.

Tom Smith
24th July 2007