More Christmas shoppers 'used instalment credit'

Monday, February 22nd 2010

More shoppers used instalment credit in December as they purchased their Christmas goods, according to the Finance & Leasing Association (FLA).

A rise of 17 per cent in the amount of such credit used was noted in the last Christmas period compared with 2008.

The FLA predicts that this increase was party down to the fact that VAT rates were being restored to 17.5 per cent in January, so shoppers took advantage of savings to be made via instalment credit.

Head of consumer finance at the organisation Fiona Hoyle said: "Customers are looking at the financial products available to them and using credit products to meet specific needs."

Products purchased via instalment credit include goods costing under £700, such as home electronics.

Ms Hoyle explained that the high street has benefited from such credit being offered, although store cards could be endangered by proposals from the Conservative Party.

Writing for the Conservative's blog last year, MP Andrew Selous said the party would penalise any retailer who charged more than 25 per cent interest on store cards.