July was a "subdued" month for unsecured personal lending through loans, overdrafts and credit cards, new figures reveal.

A report from the British Banking Association (BBA) showed that unsecured personal lending rose by £0.3 billion in July, in line with an average monthly rise of £0.3 billion over the past six months.

Loans and overdrafts proved increasingly popular areas for unsecured lending in July, rising by £0.6 billion, while credit cards fell out of favour, with borrowing falling by £0.3 billion.

The fall in popularity of credit cards reflects changes in the way people are managing their finances, according to BBA director of statistics, David Dooks.

"The robust nature of mortgage lending continues, with recent monthly net increases not far short of the movements seen when lending peaked in 2003/4," he said.

"By contrast, unsecured lending remained subdued in July, with borrowing on credit cards again reducing."

Net mortgage lending increased by an underlying £5.7 billion in July, while total net lending to individuals rose by an underlying £6.03 billion.

First Time Buyers not protected - 22nd August 2006