Portugal splurges on easy credit

Portugal’s residents again are gorging themselves on credit card spending, taking out mortgages and buying new vehicles in a record breaking splurge the likes of which have not been seen for ten years.

Mortgages are at the top of the list with numbers back to the heady days before the crisis but the Bank of Portugal appears untroubled, saying the credit boom simply is a result of people having more money and more people having jobs.

The situation is not all rosy as the Bank of Portugal also revels that there are 137,000 Portuguese credit card holders in default.

Despite the Bank’s recent guidelines issued to banks to gently persuade them to ease off on granting credit, mainly by tightening the acceptance criteria, non-mortgage consumer credit rose 10.3% last year, mostly granted as car loans.

The credit card boom has been swollen by 43,000 new users and the total amount now owed by card holders has topped €3 billion.

The Bank of Portugal points to overall default rates, stating that debtor numbers have declined as last year just under 200,000 people were unable to meet credit and credit card repayments.