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Credit card spending falling

Fri, 08 Aug 2008

According to recent reports, the credit card industry is suffering due to the tighter economic climate. Credit card spending, the G2 Data Dynamics study finds, has dropped by some £4.4 billion in the first half of this year compared to last year.

The reason for falling usage of credit cards could be related to security, with growing levels of credit card fraud . Many borrowers, however, simply can’t afford a credit card at this point in time.

The G2 Viewpoint online panel surveyed some 30,000 UK consumers, and indicated that overall spending slumped between January and June this year. The Commercial and Operations Director at G2, Alan Thorpe, reportedly commented:

"Whilst there has been a general slowdown in consumer spending, "plastic pinching" is more likely due to a redirection of spending towards ‘essentials’ such as food, energy and mortgages, which many would not normally pay for using a credit card. With little surplus cash about, it’s essential that companies listen to their customers and give people the products and services they want. It is also crucial that they maintain ongoing contact with customers during this downturn, to ensure spending bounces back when the economy recovers."
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