Belfast Telegraph

Stricter rules on credit card borrowing to be imposed

By Vicky Shaw

Households could find it harder to take on more credit card debt in the coming months as banks and building societies plan to impose stricter borrowing criteria.

The Bank of England's Credit Conditions Survey found lenders expect to impose stricter credit-scoring criteria for people trying to take out plastic in the coming months, although mortgage availability is predicted to increase.

Lenders reported that the availability of non-mortgage credit decreased slightly in the first quarter of this year and was expected to decrease further in the second quarter.

The report said that in the second quarter of 2017 lenders "expected credit scoring criteria on credit card lending to tighten significantly".

But lenders do expect to make further increases to interest-free periods on credit card offers in the second quarter of 2017. Debt-help charities have raised concerns in recent months over figures showing strong growth in consumer credit.

They have warned that some households may find themselves in financial difficulty if their borrowing becomes overstretched.

Demand for credit card borrowing is expected to increase slightly in the second quarter of 2017, the survey found, while demand for other non-mortgage loans is expected to dip slightly.

Howard Archer, an economist at IHS Markit, said the Bank of England had "clearly become more worried about consumer borrowing and debt levels in recent months".

And he said it could become vital for banks to adopt tighter lending standards in future months.

Belfast Telegraph