Consumers 'cutting back rather than getting into debt'
Published On 6 May 2008
Consumers do not plan to borrow more in credit cards or take out new loans in the face of the credit crunch, a new report has found.Data released by the Fair Investment Company showed that the credit crunch was really starting to impact on consumers, especially those with mortgages.
Despite stretched finances, just one per cent of those questioned said they planned to apply for a new credit card to make ends meet. Similarly, only three per cent said they would look at extending their overdraft.
Instead, 23 per cent revealed they would cut back on spending on luxury goods and 16 per cent indicated they had cancelled a holiday.
"The small number of people who plan to get more credit just shows how the economy has changed. This time last year our results would have been very different because credit was easier to come by and seen by many as the easy way out," the company's director, David Doulton, explained.
"Overall though, our research shows that those who are finding that money is tighter are taking action as opposed to getting into debt.
"This is good news - without making sacrifices, many households will find themselves treading water, increased energy bills and mortgage rates make this inevitable for many during the credit crisis."
