Banks and building societies are tightening up on non-mortgage lending to households and snipping the length of interest-free periods, according to a Bank of England survey.
The length of interest-free periods for balance transfers on new credit card lending was reported by lenders to have decreased slightly over the past three months - the first fall since this question was first asked at the start of 2015.
But the length of interest-free periods for purchases on new credit card lending was reported to have increased slightly in the third quarter.
The proportion of non-mortgage credit applications being approved has fallen significantly in recent months, the report found.
Lenders said the availability of non-mortgage credit to households decreased in the third quarter of this year and was expected to see a “significant” decrease in the next three months.
Credit scoring criteria for granting both credit cards and other types of non-mortgage loans tightened further in the third quarter - while the proportion of unsecured credit applications being approved fell significantly, the report said.
The findings in the Bank’s latest Credit Conditions Survey follow mounting concerns that some households are at risk of over-stretching themselves amid rising living costs and speculation over a possible rise in the base rate from its current low of 0.25%.
There were signs that some households are finding it more of a struggle.
Default rates on credit card lending were reported to have increased slightly in the third quarter, while those on other unsecured lending increased significantly, the Bank said.