Wednesday 17 January 2018

We're all tearing up the plastic

As the recession continues to bite, newly cost-conscious consumers are taking the scissors to their flexible "friends" and chopping up their credit cards. The latest figures show that another 6,000 people closed their credit card accounts in December.

With the mortgage crisis worsening the news that credit card debt, which at €2.6bn is down over €300m from its peak level, is falling is a welcome development. In many other countries experiencing economic difficulties credit card debt has increased as consumers, unable to access other, cheaper forms of credit, use their credit cards as a sort of overdraft of last resort.

The fact that this doesn't seem to be happening here represents a rare chink of light into the economic gloom. At the same time as they are cutting up their credit cards, consumers are also squirreling away record amounts of cash, with Irish households having saved €91.3bn at the end of last year.

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