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Consumers 'reel in' borrowing during credit crunch

Consumers are "reeling in" their borrowing on things like credit cards and personal loans as spending levels drop due to the current credit crunch, a debt expert has said.

Chris Tapp of charity Credit Action also said that with lenders tightening their belts in the current financial climate, some consumers who really need to borrow would have to look at "higher cost alternatives".

According to Debt Help UK, 74 million credit cards have been issued in Britain, which account for 55.2 per cent of all credit cards in Europe.

However, Mr Tapp said, with the credit crunch now taking hold, some people may find that card issuers are becoming more cautious and stricter about their lending criteria.

"It's likely to be a year in which, as the economy more generally slows down, the rate of borrowing will - to an extent - slow down with it," he said.

Credit Action is a national charity that offers financial advice and training to help people better manage their money.