Outstanding credit card balances contract by 11.6% in a year

Outstanding balances on UK credit card accounts contracted by 11.6% over the 12 months to April as a result of repayments outstripping new borrowing in the year, new UK Finance figures have revealed.

The banking body confirmed that April saw 258 million credit card transactions, a total 57.2% higher than April 2020, although this was 14.4% down from April 2019.

The total spend on credit cards for the month reached £13.7bn, UK Finance added, which was 58.6% higher than April last year, but 21.5% down on April 2019.

For debit cards, UK Finance’s figures also showed there 1.6 billion debit card transactions during April, which was 59.5% higher than in April 2020, and 1.4% more than in April two years ago.

The total spend on debit cards of £57.3bn was a figure 31.6 per than April last year, as well as 6.9% higher than April 2019.

Commenting on the figures, Hargreaves Lansdown personal finance analyst, Sarah Coles, said that the “golden era of debt repayment” started fading in April, and is likely to be eclipsed entirely amid a coming summer sending spree.

“Back in April we were still repaying more of our credit card debts than we were spending on plastic, and people continued to cut up their cards and close their accounts,” Coles said. “However, as non-essential shops and pub gardens opened in April, the speed at which we paid off our card debts dropped significantly.

“The summer spending spree last year meant that in July and August we returned to spending more than we repaid on cards, and we can expect something similar this year too.”

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