Credit Card Spending At Record High

Credit Card Spending At Record High

Assessment

Interactive Video

Business

University

Hard

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Consumer borrowing for credit cards and personal loans has surged, reaching record levels according to the Bank of England. This increase is attributed to improved economic conditions and consumer confidence, not just pre-Christmas spending. Lenders have relaxed credit scoring and made borrowing easier, contributing to this trend. However, experts warn that easy credit can lead to financial difficulties if not managed properly. Despite increased borrowing, default rates on credit card lending are declining.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is one of the main reasons for the increase in consumer borrowing during the Christmas period?

Increased consumer confidence

Lower interest rates

High living expenses and Christmas costs

Government incentives

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How have lenders changed their approach to credit scoring tests recently?

They have made them stricter

They have kept them the same

They have loosened them

They have eliminated them

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is expected to continue due to the improving economy and consumer confidence?

Decrease in consumer borrowing

Increase in consumer borrowing

Fluctuation in consumer borrowing

Stagnation in consumer borrowing

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a potential risk of easy but unaffordable credit?

It can reduce financial difficulties

It can turn manageable debt into unmanageable debt

It can lead to increased savings

It can improve credit scores

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Despite increased borrowing, what trend is observed in credit card lending?

Fluctuating default rates

Increasing default rates

Stable default rates

Declining default rates