Consumers shun store card lending27 January 2011
Shoppers remained reluctant to borrow to fund high street spending in November despite a surge in demand for personal loans, figures have indicated.
Statistics from the Finance & Leasing Association show that just £202 million was advanced on store cards during the month, a slump of 25% compared with November 2009.
Borrowing through store instalment credit - which helps people to buy large items such as furniture or household goods using monthly payments - also fell by 11%.
Credit card lending remained the largest area of advances, though it remained flat year-on-year at £2.71 billion.
Borrowing through store cards was also down 33% year-on-year in October, while store instalment credit dropped by 27%.
Overall, total advances by FLA members during the month were unchanged on a year earlier at £4.38 billion.
A range of new measures to protect credit and store card customers came into force at the beginning of the year, and further changes are due to come in at the beginning of next month, when the EU's Consumer Credit Directive becomes law.
Fiona Hoyle, FLA head of consumer finance, said: "These figures send a clear message to the Government about the challenges to be faced when considering further regulatory changes in the consumer credit sector while ensuring that the UK maintains a competitive market with real consumer choice.
"Against a backdrop of contracting markets, the Government must consider carefully the impact on the markets of any further changes to the credit regime."
Copyright Press Association 2011