Credit cards not as popular as secured finance
According to recent figures secured finance is becoming more popular amongst borrowers than credit cards, with savvy borrowers in the UK opting to take up lower interest rates, longer repayment periods, and set repayments rather than the high interest rates that fluctuating repayments that come with credit card borrowing. The information relating to secured borrowing compared to credit card borrowing comes from the British Bankers' Association.
The British Bankers' Association stated: "We can see that the January sales did not encourage borrowing on credit cards. As in the second half of last year, card borrowing is contracting, and with weaker retail sales being reported this reflects the consumer's current attitude to spending and their commitments." The Association added: "Mortgage lending continued to be buoyant, as we expected following the high volumes of approvals in the final quarter of last year."
Amongst the reasons for this latest trend in borrowing in the UK are the rising interest rates attached to credit cards, along with the fluctuating repayment structure attached to cards, and also the rising level of equity that homeowners are enjoying in the UK as house prices continue to rise. Borrowers in the UK are able to get some very good secured loan deals these days, and with the equity in their homes reaching sky high levels are able to borrow far more than they would be able to borrow on an unsecured basis.
However, experts advise consumers to ensure that they still shop around for deals on secured finance, as the interest rates and other terms and conditions can vary quite significantly from one lender to another, and therefore by shopping around consumers can make sure that they get a great value deal on loans that are secured against the home.
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