Credit cards relied on in times of income instability
By UK CreditCards.com
Published: 30 October 2009
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Consumers facing sudden changes in their incomes often depend on credit cards, new analysis suggested.
Chris Tapp, director of financial charity Credit Action, said that the cards are used to "smooth out peaks and troughs" in personal income, which can be caused by life events such as being made redundant. He added that many Britons would continue to be dependent on credit card borrowing in future.
Evidence from the Bank of England suggests that the credit card sector is bearing up well, despite the pressures of the financial crisis and economic downturn.
Figures for September 2009 from the institution suggested that overall lending on the cards increased by £79bn.
Mr Tapp said: "We are not seeing significant amounts of growth at all when it comes to credit card lending, but it is performing slightly better than other types of consumer credit."
Unemployment has been rising in the UK throughout 2009. It hit a new 14-year high of almost 2.5m according to latest official figures from the government.
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