Consumer debt is the amount of money that consumers owe. Consumer debt occurs through borrowing on:
- Credit cards
- Personal loans
Consumer debt also increase because interest payments are added to the debt.
Some debt is secured against assets (mortgages) some debt is unsecured.
Level of consumer debt in the UK
Factors that cause consumer debt
- Cheap borrowing
- High levels of consumer confidence
- Easy supply of credit. Banks encouraging lending through enticing offers.
- Social and cultural factors and attitudes to spending
- Rising house prices encouraging home-owners to take out debt.