Outstanding balances on UK credit card accounts grew by 9.4% in the year to November 2022, new figures published by UK Finance have shown.
More than half (50.9%) of outstanding balances incurred interest over the same period, which compared to 52.9% a year ago.
UK Finance’s figures revealed there were 355.1 million credit card transactions in November, a total 0.3% more than in November 2021. The total spend for the month of £19.6bn was 5.3% higher than November 2021.
The banking body’s latest figures also showed that a total of 2.1 billion debit card transactions were carried out by UK cardholders in November. This 8.1% higher than in November 2021, while the total spend on debit cards in November, of £66.6bn, was also 5.3% higher than the same month a year earlier.
“Credit card spend is on the rise as the cost of living crisis continues to pummel our finances,” commented head of retirement analysis at Hargreaves Lansdown, Helen Morrissey. “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.”
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