Increasing levels of debt across the nation have lead many consumers to begin saving rather than spending on their credit cards in recent months.

Many people, worried about the threat of redundancy or high levels of debt as the credit crunch looms, began to pay back more money than they took out, with on average, £1.76 paid back for every £1 borrowed in the last three months of 2008.

With some experts in the financial sector predicting some "green shoots" of recovery in the economy it looks like many Britons may go back to spending at higher rates on their credit cards if new figures are anything to go by.  According to the independent financial advisor, Unbiased, people are borrowing in greater numbers in the last three months.

David Elms, an independent financial advisor, from Unbiased, said: "After the relentless financial gloom of last year, the public mood seems to be changing with financial forecasters spouting optimism over Britain's economic prospects.  However, though this is certainly a positive development, it is vital for consumers to continue nurturing their financial position. Anyone with financial concerns should seek professional advice from an independent financial advisor."

Summer spending

This increase in credit card spending at home has led some experts to suggest that there may be light at the end of the tunnel for the economic crisis but some lenders have been quick to point out that going into the summer months many people will be continuing to tighten their belts.

Tesco have said that lower levels of spending will be reflected in people’s choices on holiday and could see a rise in the number of self-catering trips.

A Tesco sposkesman said: "The trends at home look likely to be mirrored in our holidays abroad with people quite happy to swap their nights out for a holiday-home cooked meal. This means that holidaymakers may need to sacrifice a few glad rags to make room in their suitcases for essentials like tea, coffee and cereals as saving through a self catering break becomes a popular choice."

Balance transfers

According to a new report it may not only be borrowers who are looking to cut back, but lenders may be as well.  The survey which was reported this week found that around two million Brit’s, or one in ten, had been refused a new credit card deal in the last year.  The majority of those who were turned down were attempting take advantage of balance transfer deals.

According to the company behind the survey, for many people who have a poor credit history it is going to become increasingly difficult to get hold of credit as lenders look to strengthen their financial position.  They also point to the phasing out of 0% interest deals and a reduction in balance transfer offers.

A spokesperson for the credit card industry acknowledged that rates of lending had dropped around a third in the last year but noted that lenders were previously being criticised for giving out cards to people who could not afford them.

Jemma Smith, from Apacs, the UK credit payment firm, said: "Back in 2004-2005 credit card companies were strongly criticised for lending too freely; now they are being criticised for not lending enough.