Households borrow less

13/02/2007 09:30

Dutch households borrowed less money for consumption purposes in 2006 than in the eight preceding years. The outstanding debt on consumer loans has fallen further. The overdrafts on current accounts did increase further in 2006. The total consumer debt was slightly lower than in 2005, according to figures from Statistics Netherlands.

Loans amount to less than 10 billion euro

Newly granted  consumer loans amounted to 9.7 billion euro in 2006. This is 4 percent less than in 2005. It is the first time since 1998 that the credit granted was below 10 billion euro. Continuous credit, in particular, decreased.

Households repaid more on consumer debts than they borrowed in 2006. This pushed down the outstanding debt on consumer loans from 17.6 to 16.9 billion euro in 2006. This is the second year in succession that the debt has decreased, following twenty years of increase.

Deeper in the red

Overdrafts on current accounts did increase again in 2006. On 31 December private households had a total overdraft of 8 billion euro on their current accounts. This is 7 percent more than twelve months previously. Current account overdrafts seem to be replacing consumer credit.

Smaller consumer debt

The total consumer debt is the sum of overdrafts and outstanding consumer credit. At the end of 2006 this total debt was slightly lower, at 24.9 billion euro, than twelve months previously. This is the first decrease since 1985. The total debt had already stabilised in 2005.

Households had an average consumer debt of 3.5 thousand euro in 2006. This is around the same level as in 2005. One third of the total debt consisted of current account overdrafts. Five years ago this was one quarter.

Credit card popular form of credit

Consumers are borrowing more and more via their credit cards. In 2006 the amount borrowed via these cards rose by 4 percent to 3.2 billion euro.