Overdraft more popular due to restricted access to loans and credit

According to a recent report the restricted access to loans and other forms of credit such as credit cards, which has stemmed from the global credit crunch, has resulted in the popularity of overdraft facilities increasing.

More people are now turning to their overdrafts in order to fund their financial needs because they cannot get access to affordable loans or credit cards in many cases.

Since the onset of the global credit crunch many lenders have tightened up on their lending criteria, making it more difficult for consumers to get finance, and also cutting back on the range of financial products available.

With many households suffering financial problems as a result of rising livings costs and bills, many have found it difficult to stay afloat without the safety net of being able to get credit.

Many people have now had to turn to their overdrafts in order to get the finance that they need, and according to recent figures the last couple of months has seen a sharp rise in the level of overdraft use amongst banking customers.

Consumers have had to cope with rises in costs such as energy bills, council tax, water rates, petrol, and food prices.

It is unlikely that the financial markets will get back to normal for some time, and therefore more and more people may be relying on overdrafts, and short term financial solutions such as pay day loans.