Abacus Daily Debt News

People ‘paying off debts’ in wake of credit crunch

Many people have been changing their spending habits in the wake of the economic downturn and have been able to pay off some debts, it has been claimed.

Sandra Quinn, director of communications for Apacs, the UK payments association, commented: "Lots of people are in a better financial situation in some odd way."

She noted that mortgage rates have come down in recent months, leaving people with spare money with which to clear debts.

And Ms Quinn revealed that more people are using their debit cards rather than their credit cards, "because they are spending what they have rather than what they can borrow".

Her comments came following new figures from Apacs, which showed that the total value of debit and credit card purchases stood at £94.2 billion in the first quarter of 2009.

The report also found that the total amount of cash machine withdrawals hit £45.1 billion in this period.

By Jamie Price