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Consumers shy away from credit

Credit card debt took a £0.1 billion dip in March, according to the British Bankers Association (BBA), with consumers reluctant to add to personal debt.New borrowing on credit cards was down three per cent on last March at £7,017 million. Following seasonal adjustment, net lending fell by £117 million. The number of new personal loans and overdrafts taken out in March was also down on this time last year, dropping by £47 million, where recently it has risen £127 million a month on average.David Dooks, BBA director of statistics, said: "As people continue to reduce their commitments, weaker spending on credit cards and lower new loan borrowing than a year earlier led to another overall fall in personal borrowing."People were also reluctant to invest in mortgages with £5.1 billion worth of net mortgage lending recorded this March, dropping from the monthly average of £5.5 billion seen over the previous six months.The Royal Institute of Chartered Surveyors (Rics) recently reported that mortgage enquiries had fallen for the fourth consecutive month in March, again showing that consumers are shying away from stretching their credit. Mr Dooks commented: "In the last two months net lending has risen less sharply and, compared to the same time last year, the number of mortgages approved in March was lower, indicating that weaker demand is starting to emerge."

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