Some consumers 'will be forced into more expensive borrowing after credit crunch'
Published On 27 February 2008
As lending criteria have tightened on the back of the credit crunch, consumers in need of money have had to look to more expensive loans and credit cards, an industry expert has said.Chris Tapp, director of Credit Action, explained that most people had tried to reduce their spending in the tighter economic situation but that some people still needed to borrow money to make ends meet.
"People in the past may have been able to obtain high street credit cards and these types of discounted buying, and they may find now that as people tighten this lending criteria they are forced to look elsewhere for higher cost alternatives, if they really do need to borrow," Mr Tapp explained.
"It's likely to be a year in which, as the economy more generally slows down, the rate of borrowing will - to an extent - slow down with it."
Recently, Defaqto reported that consumers with good credit ratings could still obtain attractive deals from lenders.
However, David Black, the principal banking consultant at the company, warned: "If you are unlikely to repay the entire balance every month you should concentrate on the interest charged rather than the rewards offered."
