FLA reveals fall in credit card business

The ongoing economic downturn is affecting consumers' use of credit cards.

Consumers are looking away from using credit cards as a means of funding purchases, according to new research.

The Finance and Leasing Association (FLA) - the trade association for the asset, consumer and motor finance sectors - reveals that overall new consumer lending among its members for the 12 months leading up to March 2009 stood at £58 billion, a fall of the 13 per cent from the previous year.

Of this, credit card lending accounted for £33.5 billion, four per cent below the preceding 12-month period, while March itself saw £2.79 billion issued.

Geraldine Kilkelly, head of research and chief economist for the FLA, states that "overall, consumer finance is still being hit by the downturn", in spite of moves by lenders and retailers to offer "attractive" 0% interest credit deals.

Speaking earlier this month, Neil Munroe, external affairs director at Equifax, claims that people are becoming increasingly wary of using credit cards to make purchases as they take steps to actively reduce their debts.

Written by Nate Sawyer.