Home furnishing stores such as Land of Leather have said the reduction of easy credit is starting to take its toll on sales and profit after the past couple of months. Orders are down by 16% and the number of suites bought on credit has dropped 15% too.
Customers either could not afford the extra repayments or were not approved for credit in the first place. Credit card applications have risen dramatically over the past 6 months from 2.7 million being turned down, to a whopping 3.3 million applications being rejected in October 2007.
Even unsecured loan rejections increased by half a million, even those with a good credit history. It seems like lenders over being extra cautious with who they lend to for fear of huge losses.
Many people have found that the available credit isn’t so available anymore and as a result have stopped buying furniture such as sofa’s and three piece suites for their homes.
2008 is expected to have much lower consumer spending than at any other point this decade. It’s a sharp wake-up call for us all.
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Amazing, the drop is too big, I think and the numbers are also considerably large. In such case, I will never even think of buying a sofa and other furniture with my credit card.