Dutch go cool on loans, but draw higher overdrafts

10 Feb '06

3 min read

The Dutch population borrowed less in the form of consumer credit in 2005 than in 2004.

Moreover, they paid back more of their debts. As a result, the outstanding debt on consumer credit fell for the first time in twenty years.

On the other hand, the total overdraft on current accounts was substantially higher in 2005, according to figures from Statistics Netherlands.

Consumers borrow less Consumers borrowed a total 10.1 billion euro to purchase items such as cars, furniture and consumer electronics in 2005. This is 5 percent down on 2004.

They repaid 12.3 billion euro in debt and interest on consumer loans, 8 percent more than in the previous year.

Hefty increase in overdrafts

The total overdraft on current accounts rose again in 2005. At the end of December 2005 nearly 3 million current accounts were overdrawn for a total amount of 7.5 billion euro. This is 9 percent more than at the end of 2004.

However, as the number of accounts overdrawn hardly changed, the net overdraft per account was higher: it rose from 2.4 thousand euro in 2004 to 2.6 thousand euro in 2005.

More and more credit card debt

While total consumer credit decreased in 2005, consumers did use credit cards more. The amount of new credit granted on credit cards was 3.1 billion euro, 5 percent more than in 2004. Last year credit card credit accounted for 30 percent of the total amount of credit.

This shareis increasing every year. Most money is still borrowed in the form of revolving credit, however. In 2005 this accounted for 59 percent of total credit.

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