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UK Consumer Confidence Decreases

According to a survey by the nationwide building society consumer confidence in the UK has fallen yet again in the last month.  The confidence has fallen at a faster rate than in the last three years startling the economy and creating a further credit squeeze.  It seems the confidence index is at 86 since November and down from 98 in October.

So how are credit card companies working to rebuild that confidence or can they?  Many of the consumers are fearful of the credit crunch and already experiencing poor to bad credit.  The consumers who have suffered from credit problems have been trying to obtain credit cards to rebuild their credit, but is this the way to go?  Credit cards allow consumers to work on trying to pay their bill on time during the month, and re-establish a solid repayment history.  However most have found that the credit cards are part of what is shaking the confidence of the nation.  These credit cards come with hefty interest rates that can cause more of a debt to consumers.

Let’s look at that survey again for a moment.  In May 2004 when the survey began many of the companies began to see a steady decline on a month to month basis of the confidence in the UK market.  The uncertain effects of the credit crunch are the main cause of this decline.  Consumers are no longer able to trust the economic market, and this has pressured the Bank of England to lower their interest rates.  What you will not find is the bad credit credit cards lowering their interest rates.  They are still seeing many consumers as a risk that they are unwilling to help out.  This means that the credit cards may continue to be a difficulty for many of those who have attained them.

You will also find with the bad credit credit cards the banks and issuers have begun to make it more difficult for consumers to obtain their cards as well as standard credit cards.  This is all due to the effects of the credit crunch.  Many of the Christmas shoppers have been cautioned against using any credit card during the Christmas season to avoid having to repay the debt in 2008.  Christmas is a difficult time for consumers because they usually don’t have the funds and rely more heavily on the credit cards to purchase Christmas gifts.

It seems that with the warnings and the recent credit crunch some consumers are beginning to realize the trouble.  They have on a whole decreased the use of credit cards for spending.  Even when they use the bad credit credit cards they are using them in a discerning fashion and buying quality over price.  This is going to help in the long run of having the items last longer.  Many of the consumers are also using the credit cards in a non food item manner.  Many of the consumers in the UK have realized how credit cards are affecting their credit rating.  They are trying to save their credit rating, but still enjoy the holidays, so they are becoming more responsible on the whole.

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