
Latest data from UK Finance found that credit card balances grew in November 2022. The data found that there were there was 355.1 million credit card transactions in November, 0.3 per cent more than in November 2021. The total spend of £19.6 billion was 5.3 per cent higher than November 2021.
Outstanding balances on credit card accounts have grown by 9.4 per cent over the twelve months to November and 50.9 per cent of outstanding balances incurred interest compared to 52.9 per cent twelve months ago.
There were also 2.1 billion debit card transactions in November, 8.1 per cent more than in November 2021. The total spend of £66.6 billion was 5.3 per cent higher than November 2021.
Commenting on the figures Sam Welch, Director of Banking at TransUnion said “The latest card spending figures from UK Finance show the continuing impact of the ongoing cost of living crisis, with credit card spend for November 2022 up 5.3% compared with the previous year (at £19.6 billion), whilst outstanding balances on credit card accounts were up by 9.4% for the same period.”
“Access to credit is increasingly important to consumers as they combat rising living costs, and nearly half (49%) are planning on taking out a new credit card in the coming year, according to TransUnion’s Consumer Pulse study.”
“With these figures coming against the backdrop of the challenging economic climate, finance providers must ensure they’re using robust affordability assessments and advanced credit data to make informed lending decisions.”
Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown said “Credit card spend is on the rise as the cost-of-living crisis continues to pummel our finances. We put £19.6bn on our credit cards in November as we look to manage increasing prices in the run up to Christmas. The big concern is that outstanding balances aren’t being paid off – these have grown 9.4% over the year in a sign people are struggling to make ends meet. Many people will have blown through their pandemic savings and with little if any buffer left, they are increasingly using their credit cards.”
“However, there are signs people are looking to manage these balances. The proportion of outstanding balances incurring interest has gone down which could be a sign that people are looking at interest free balance transfers to mitigate interest payments and help them pay down any outstanding debt.”