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Consumer credit crashes for new clients

New borrowing on credit cards dropped by seven per cent in February compared to this time last year, latest figures have shown.The major banks reported that a total of £6,224 million was lent on cards last month, a net decrease of £4 million after seasonal adjustment.The amount borrowed on new personal loans and overdrafts also fell by £183 million last month from the February 2006 figure, converse to the recent monthly average growth of £225 million. Consumers with existing credit cards remained lukewarm with borrowing unchanged in the month, while other loans and overdrafts dropped by £0.2 billion.Mortgage-lending was also down, with the cancellation of 5,000 approvals this January. David Dooks, BBA director of statistics, commented on the lending statistics: "Demand appears to be moderating, as the monthly number of house purchase approvals was lower than a year earlier for the third month running and net lending was below trend in February."Reflecting tighter conditions for personal disposable income, consumer credit continues to be weak."

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