Consumers warned not to turn to credit
15th May 2008
With inflation now at its highest level for 13 months, consumers have been warned not to turn to credit to help fund the increase in household bills.
Credit Action, the money education charity, has warned that although it may seem a good short-term solution, turning to credit could result in consumers getting into 'real difficulty'.
Chris Tapp, director of Credit Action, explained that although the number of people spending on credit has increased in the last 12 months the credit crunch could put a stop to borrowing.
Mr Tapp said: "Lenders are much less keen to lend than they were even 12 months ago, certainly with things like overdrafts, credit cards and loans and those types of borrowing."
Consumers will find it hard to bridge the gap as household bills rise. The Government's target measure of inflation, the Consumer Price Index (CPI) was up from 2.5 per cent in March to three per cent in April.
The largest contribution to the change in the CPI annual rate came from housing and household services due to increases of up to ten per cent in the price of gas, electricity and heating oil.