Loans What You Need to Know

Approximately eight million people are caught in a debt trap, paying out an average of a quarter of their incomes each month to their lenders. 

Consumer credit is a debt that a person incurs when purchasing a good or service. Consumer credit includes purchases obtained with credit cards, lines of credit and some loans. Consumer credit is also known as consumer debt. Consumer credit is divided into two classifications: revolving credit and installment credit. The most common form of consumer credit is a credit card.

Consumer credit is frequently measured by economists and other financial analysts as it serves as an indicator of economic growth. For example, if consumers can easily borrow money and repay those debts on time, then the economy is stimulated resulting in economic growth.

From the Financial Times:

British banks expect consumers’ appetite for borrowing to evaporate in the first quarter of 2019 as a weak economic outlook keeps households from taking on new borrowing, according to a Bank of England survey released on Thursday. The survey of major British lenders found that more forecast that demand for credit card lending would fall during the first quarter of the year than during the financial crisis. The survey added to a growing body of evidence that political turmoil in Westminster is having a chilling effect on the economy, with the uncertainty leading businesses and consumers to hold off from making major financial decisions. A net balance of 20.7 per cent of lenders said credit card borrowing would slow over the next three months, a record high for the survey, which began in 2007. Meanwhile, a net 17.5 per cent of British lenders said they expected mortgage demand to fall during the first quarter of 2019, the highest percentage since the final quarter of 2010. The figures follow British Retail Consortium data showing that retail sales in the important Christmas trading period were their worst since 2008, and figures from the automotive industry showing that in 2018 car sales dropped at the fastest rate since 2009.

Here is a video about borrowing: