Credit cards debt and personal loan figures increase

Credit card spending rose by 7.3% and personal borrowing through loans jumped by 14% in December, trade body UK finance has revealed in its latest Household Finance Update.

Figures from the trade body of the UK banking and finance industry have revealed that the credit card spending of £11.8 billion in December 2019 was 7.3% higher than in December 2018.

Repayments continue to offset spending. The result is that the level of borrowing on cards is currently growing at only 2.4% annually.  This is a continuation of the general slowdown from the recent high of 6.6% in October 2016.

Personal borrowing through loans was also on an upward trend. In December 2019 it was 14. per cent higher than in December 2018. The higher increase reflects the exceptionally weak demand a year earlier.

Overdraft borrowing has been declining over recent years, such that December’s level was 0.8 per cent lower than at the same time a year earlier.

The figures also showed that a third of credit card transactions and almost half of debit card payments are now contactless, There were 1.6 billion transactions on debit cards in October 2019, 9.3 per cent more than in October 2018. This reflected a total spend of £51 billion, 2 per cent more than in the same period in 2018.

There were 291 million transactions on credit cards in October 2019, 0.7 per cent fewer than in October 2018. This reflected a total spend of £16.6 billion, 2.7 per cent less than in the same period a year earlier.

The annual growth rate of outstanding balances on credit cards stood at 3.3 per cent in October 2019, continuing the downward trend from its recent peak of 8.3 per cent at the start of 2018.