Credit Card Borrowing Down

27th September 2007

The amount of money that UK consumers have borrowed on their credit cards fell again in August, according to the latest figures from the British Bankers Association. Total figures for credit card borrowing reduced by £102 million in August, which compares to a fall of £73 million in July.

Credit card borrowing has shown an average monthly fall of £116 million over the first 6 months of 2007. The total spent on credit cards during August was £7.3 billion, which was an increase of 2% over July 2006 but because credit cardholders are at least matching their spending with repayments, overall credit card borrowing has continued to decline.

David Dooks, the British Bankers Association's director of statistics said that, "The long-term net repayment of credit card debt continued, while borrowing through loans and overdrafts also fell in August, giving a subdued picture of consumer credit again"

Financial analysts have suggested that recent interest rate rises, which have increased mortgage repayments, and with the uncertainties with finances in general, including recent Northern Rock worries, that people have decided to reduce their credit card debts rather than increasing their borrowing on their credit card.