Credit card balance transfer activity hits £1.8bn

Latest UK Finance data has revealed that Credit card balance transfer activity reached £1.8 billion in value in January, according to UK Finance data (The Independent).

There were 347.9 million credit card transactions in January, 8.4 % more than in January 2023. The total spend of £20.4 billion was 8.4 % higher than January 2023.

Outstanding balances on credit card accounts have grown by 9.4 % over the twelve months to January and 50.5 % of outstanding balances incurred interest compared to 51.3 % in January 2023.

The latest analysis showed that there were 2.06 billion debit card transactions in January, 5 % more than in January 2023. The total spend of £64.6 billion was 0.8 % lower than January 2023.

There were 1.93 billion debit and credit card transactions in the UK in January, 2.6 % more than in January 2023. The total spend of £71.5 billion was 0.8 % lower than January 2023.

Contactless payments accounted for 62 % of all credit card and 74 % of all debit card transactions. There were 1.39 billion contactless card transactions in January, 3.6 % more than the 1.34 billion in January 2023. The total value of contactless transactions was £21.5 billion in January, a 5.5 % increase on £20.3 billion in January 2023.

The number of contactless credit card transactions was 8 % higher than January 2023. The number of contactless debit card transactions was 2.9 % higher than January 2023.

Janine Randolph, Head of Data Management at UK Finance, said “The total amount of credit card balances outstanding continued to grow in January, but at a more moderate pace.

“Balance transfer activity hit a ten-year high, contributing to the growth in gross lending. It also meant that the volume of balances incurring interest fell slightly year-on-year. This shows us that consumers are taking advantage of lenders’ competitive balance transfer offers and paying down their outstanding balances. As such, we haven’t seen signs of a fall in consumers’ ability to make their credit card repayments.

“Consumer spending on debit cards was slightly down on a year ago. This was partly because of the usual seasonal drop after Christmas, but also due to households continuing to feel the effects of cost-of-living pressures.”