Borrowing 'is becoming more expensive'

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Borrowing 'is becoming more expensive'

Fri 16th Nov 2007

There are growing expenses associated with borrowing money due to factors such as higher interest rates, it has been claimed.

Chris Tapp, director of Credit Action, said that the recent interest rate rises are finally starting to affect the UK economy.

"For about 18 months now interest rates have gone up so you would expect to see some of that being passed on to consumers," he remarked.

"There is a bit of trying to regain some of the money that the credit lenders have lost through bad debt and lower pass rates with higher charges."

These stretched economic conditions mean that consumers have to carefully plan their spending habits in the run-up to Christmas, he added.

A total of one-third of people get into debt every Christmas to try to out-do the celebrations of the year before, according to research by Cornhill Direct. Meanwhile, the study reveals that one in ten are still in debt one year later.

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