Consumer Credit Is A 'Good Thing'

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Article Title: Consumer Credit Is A 'Good Thing'
Author: Abbi Rouse
Category: Loans
Word Count: 491
Keywords: finance,credit,loans,secured,personal
Author's Email Address: abbi.rouse@inter-financial.com
Article Source: http://www.articlemarketer.com
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Although uptake of consumer credit is falling, an industry expert has asserted that loans and credit cards still be a useful spending tool.

Helen Saxon, spokesperson for the Finance and Leasing Association (FLA), claimed that personal borrowing uptake is falling as Britons continue to feel the impact of recent interest rate rises by the Bank of England's monetary policy committee (MPC). Over the last 12 months, the MPC has increased the base rate four times which has increased the cost of secured loan repayments, with a further rise predicted to take place when the committee meets later this week.

She said: "There is less money around because people are putting more towards their mortgage. It's natural to tighten your belt in these cases and spend less on credit cards." Overall, she claimed that consumer credit can be "a good thing as long as it is used sensibly" and that the surge in its availability to borrowers has seen it "pretty much propping up the economy".

The spokesperson added that credit can act as a "leveller" as it gives Britons the opportunity "to buy things that otherwise they couldn't afford or that they would have to save up for a long time for". However, Ms Saxon warned that lenders need to do as much as possible to ensure "safeguards" are in place so that consumers do not develop unmanageable debt problems where they are unable to make repayments on existing loans.

"Responsible lending is a buzzword that has been around for many years - and lenders do try and do that to the best of their ability with the data available," the FLA representative pointed out. She added that consumer credit lenders such as John Lewis and Marks & Spencer were reported to have their finance provided from a bank which in turn consults repayment and credit reference agencies to make certain that borrowers can afford to make pay off loans. Ms Saxon also claimed that repayments on borrowing, "especially on the credit card side", have been increasing over the past year which could indicate a greater desire among consumers to manage their debts.

In related news, it has been recently suggested that moves by the Office of Fair Trading (OFT) to make credit charges more "transparent" would be a "boon" for consumers. Stephen Rose, director of Debt Advice Bureau, claimed: "Anything that makes it clearer and more obvious to borrowers what the cost of the debt will be - what the charges are, what the interest rates are - is obviously good and they will be in a position to make a more informed choice."

He added that although the OFT proposals may not make an impact on credit card uptake, those who opt for the borrowing method "can know more and are better informed". Mr Rose went on to suggest that recent moves within the consumer credit market - which includes personal loans, credit cards and store cards - can only be good news for borrowers.

Abbi Rouse writes for AllAboutLoans.co.uk, an online loans comparison site, visit us today for information on all loan topics including cheap loans applications and loans sourcing from all leading UK providers. Our Site: http://www.allaboutloans.co.uk/
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