Credit Card Providers Are Still Attracting New Customers despite Global Economic Crisis
Credit card providers have been more successful in attracting new customers than other non-bank lending companies so far this year, it was claimed.
A new study by leading trade body the Finance and Leasing Association (FLA) revealed that the amount of new credit card funding granted in October was £2.5 billion. More people are looking for the best credit card deals in order to avoid bank charges.
Although this represents a 12% decline for the month on a year-on-year basis, other sectors such as store cards (down 16%) and secured loans (down 49%) fared worse.
Similarly, the figures revealed that £32.3 billion in new credit card finance was rubber-stamped in the 12 months to October, down by just 9% from the equivalent period in 2008.
This compared with a 17% overall decline for all members of the FLA and was also a better return than for store cards (-14%), car finance (-16%) and secured loans (-78%).
However, Fiona Hoyle, head of consumer finance at the FLA, warned that the widespread fall in new credit across all sectors is a worrying sign for both lenders and consumers.
“The government must move quickly to follow up its Pre-Budget Report proposal to review non-bank lending markets,” she said.
“Otherwise we may see further shrinkage in the market, which will mean less competition, leaving consumers with less choice.”
