Many analysts believed that the repayments made last year were a rock solid proof that consumers were becoming more cautious: more interested in repaying debts and more unwilling to get into new debts.

So should January`s figure from the Bank of England mean that this trend was coming to a standstill?

It should be taken into consideration that even £500 million isn`t an enormous amount of extra debt. In 2006 and 2007, and during the first half of 2008 consumers took on more than £1 billion of additional unsecured debt every month.

In any case, this is not just about borrowers` behavior. The behavior of lenders is also essential, and lenders have become more unwilling to lend money since the start of economic recession.

It is getting much more difficult for many people to get credit. Thus, the number of rejections of credit card applications have increased considerably since 2007.

When citizens are exhibiting caution when it comes to getting into debt, it`s not surprising that lending levels decrease. The latest figures revealed that the members of the FLA (Finance & Leasing Association), who give out nearly 30% of all unsecured loans in the entire country, provided 15% less credit in 2009 than they had the year before.

What about 2010? No one can tell, but let’s wait for February`s figures to see whether January was an exception to the rule or an new trend.


The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.