Consumers shredding credit cards with 122,000 accounts shut
CONSUMERS are cutting up their credit cards in unprecedented numbers with 122,000 consumer credit card accounts closed in the past year, new figures from the Central Bank show.
Almost €1bn was paid off personal and business credit cards in May. Consumers reduced the amount they owed on their plastic by €250m in the past year alone, the new figures show.
There was €2.6bn owned on two million credit cards held by consumers in May. This is down from almost €3bn a year ago.
The number of personal credit card accounts has fallen by 122,000 since May last year.
People are switching to using debit cards, where you can only spend what you have in your current account, instead of running up expensive debt on credit cards.
The figures from the Central Bank also show that all forms of lending to consumers continue to fall.
But there were signs of a slight pick-up in lending to businesses. The bank said loans to businesses increased by €343m during June, the first monthly rise for a year.
However, lending to businesses is still down by 3pc over the past 12 months.
Business loans with terms of between one and five years are showing the biggest falls; short-term loans have been increasing.
Lending to consumers fell at an annual rate of 4pc in June, after a 5pc yearly drop in May.
Mortgage lending was down 2.2pc in June compared with the same month last year, while lending for other purposes fell by 9.2pc.
The amount that has been borrowed by financial institutions from the Central Bank as part of the euro system fell by €2bn in June to €100.4bn.
The domestic banks accounted for €72bn of this, down €2.5bn from May.