According to the latest statistics, consumer debt may finally be showing signs of reducing.

No single factor can be directly attributed to the shift in trend, although increased pressure from consumer groups and government departments is thought to have caused the greatest awareness.

Some other primary influences include: -

• Numerous interest rate hikes over the last few months making credit less attractive.
• Greater awareness in the number of people succumbing to serious debt, illustrated through an increase in IVA and Bankruptcy cases.
• Average debt tolerance per individual at an all time high, reducing the chances of consumers being able to acquire new forms of credit.

The actual basis for the decline is drawn from the following: -

• BBA analysis suggests that consumers are spending less on credit cards as a direct result of current interest rates.
• Credit card spending has reduced month on month by approximately £170 million.
• Bank overdrafts and loans have decreased by around £95 million.

Although the UK’s debt crisis is far from over, the news is certainly positive. However, another possible reason for the decline could be due to increased mortgage costs. As a result of interest rises, many people have been stretched to their absolute limits managing mortgage repayments. Unsecured credit may have dropped, simply because there is no way people can commit to anything else.