8% increase in the number of consumers who have a credit card

New research by TransUnion has revealed that over the last 12 months, there has been an 8% increase in the proportion of UK consumers who said they have a credit card, yet a third say they don’t know their credit score.

The report also found that inflation remains above the Bank of England’s 2% target, adults are even more concerned about the impact on the cost of everyday goods than they were at the peak of inflation. The study found inflation for everyday goods is still by far the biggest household financial concern for the next six months at 56%, up six percentage points from the previous quarter and a percentage point from Q1 2024.

Amid rising costs, nearly half (47%) of UK adults who said they plan to apply for new credit or to refinance existing credit in the next year, plan to apply for a new credit card, while 17% intend to request a credit limit increase for an existing card.

James O’Donnell, Director of Research & Consulting at TransUnion in the UK, said: “Even though inflation is significantly down from where it was at its peak, UK consumers are still feeling the squeeze. For many people, income hasn’t caught up with rising costs, and as household price inflation climbs up to 3.7%, turning to credit can help make ends meet. As economic uncertainty continues in 2025, businesses and financial institutions must ensure that consumers can access the appropriate credit products to manage their finances and build resilience, without falling into unmanageable debt.”

The latest TransUnion Consumer Pulse Survey finds more than three-quarters (77%) of consumers believe that access to credit is important to achieving their financial goals, rising to 93% of Millennials and 97% of Gen Z.

Credit card adoption is spread unevenly across generations. Across generations surveyed, Gen Z are the least likely to own a credit card, with only 40% saying they’d ever had one, compared to the most at over three in five (73%) of Gen X and Baby Boomers. In fact, 59% of Baby Boomers who said they plan to apply for new or refinance existing credit in the next year, report that they will apply for a new credit card in that time period (the most among generations), whereas less than half of Gen Z (47%) and Millennials (41%) aim to do so (the least).

This divide may be driven by divergence in income growth. Almost half (46%) of Baby Boomers feel their household income isn’t keeping up with inflation, suggesting an increased reliance on credit usage. Meanwhile, a third (33%) of Millennials and nearly half (46%) of Gen Z believe their income is growing in line with inflation.

With consumers increasingly applying for credit, many are checking their credit reports to try to improve their credit scores. Facing major financial milestones such as buying their first home, 47% of Millennials who said they monitor their credit said they do so in order to improve their credit score, the highest of the generations surveyed.

Despite their crucial role in credit applications and access to financial products, over a third (34%) of UK consumers said they don’t know what their credit score is. This rises to 49% among Baby Boomers and 36% for Gen X, the highest among the generations surveyed. In fact, less than a quarter (23%) of Baby Boomers who said they check their credit score are doing so to try to improve it, the lowest among the generations surveyed. This is possibly due to their more established credit histories.

Earlier this year, TransUnion released consumer research that showed one in five UK adults would consider themselves financially vulnerable. The same research found that 10% of UK adults report they wouldn’t be able to maintain their current lifestyle without credit or financing options, yet many still struggle to access credit with 9% indicating having been turned down within the last 12 months.