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Data reveals that Portuguese people have been increasingly contracting consumer credits to cover their expenses, as well as for more frivolous costs.
Do you also need a consumer credit to complement your budget or start a project? The credit intermediaries from Poupança no Minuto help you find the best financing proposal, with a cost-free service! But first, read the data in question.
"Consumer credit could be being used to cover budget gaps"
Consumer credit has been increasingly contracted as a solution to cope with expenses of family budgets. This comes at a time when families have not been able to respond to all their obligations with just salaries and savings, with the increasing cost of living.
The economist Sérgio Lagoa from ISCTE, contacted by Lusa, as can be read in Notícias ao Minuto, explains that "Consumer credit may be being used to cover budget gaps. With inflation and higher bank installments possibly [customers] are using consumer credit as a way to cope with expenses for education, health, and even to help pay for housing credit."
It also explains that there is not a single factor to explain the growth and that inflation also impacts the increase in this credit, since prices are higher in goods and services.
With the economy growing, more positive budget prospects and increasing job stability, consumers are feeling more confident to apply for this credit, which they are directing towards less essential expenses such as travel or a car. As for banks, with higher interest rates and lower defaults, they are authorizing more consumer credit.
The economist considers that, despite the growth, consumer credit values do not seem problematic, since the "growth of the stock of consumer credit has been growing below inflation and nominal Gross Domestic Product", and that in recent years household debt has decreased. "It is not an exponential growth, it results from the particularities that families are facing," he explains, quoted in the news.
Economist Ana Cordeiro Santos from the University of Coimbra, contacted by Lusa, stated that the increase in consumer credit is related to the growing inflation, but it can also be justified due to the imbalance between income and prices evolution, as reported by Notícias ao Minuto.
According to the same, some studies have indicated that consumer credit has been more contracted by lower-income families, with a higher added risk due to more precarious employment situations. "It is also credit with higher interest rates, therefore it is access to income with much higher cost for those with fewer financial resources," warns.
Ana Cordeiro believes that the crisis resulting from covid-19, with the increase in online purchases and credit card usage, has boosted consumer credit.
But for the economist of DECO PROteste, Nuno Rico, this increase in consumer credit has been happening since 2022 with the rise in interest rates and the increase in the cost of living, leading to the tightening of family budgets. "Families cannot have savings or sufficient salary for non-recurring expenses, such as appliances, furniture, cars, education expenses, health. They use credit to deal with family budget expenses," the news article reads.
But it also indicates that the fact that it is increasingly easier to hire this credit has also helped the growth of mortgage credit, which leads consumers to not properly consider its cost and associated risks, arguing that the Bank of Portugal should strengthen supervision to verify the solvency of customers in these credits.
In the news, it can also be read that the DECO economist attributes the increase in interest rates charged on consumer credit to the rise in interest rates in the market, which is also "a way to discourage the consumer from joining", however, "that is not what has been verified".
However, economists emphasize that it is important to note that the increase in consumer credit interest rates has not been as high as in housing credit.
To hire a consumer credit, to cover your expenses or start a dream project, the credit intermediaries of Poupança no Minuto are here for you... we communicate with banks to find the proposal that best suits you.
In case you have already contracted consumer credit and also need to face expenses, consider the option of consolidated credit. This combines several financing into a single, lower installment! Contact us for a cost-free service, and ensure that you save time and money!