Credit Card Borrowing Falls

17th January 2011

The amount of money that UK consumers borrowed on their credit cards in 2010 fell to its lowest level since 2005, according to the latest figures from the Precious Plastic survey by accountants PricewaterhouseCoopers. Total credit card borrowing last year was some £97 billion according to the survey.

The number of credit cards in circulation in households across the UK has also fallen by 1.5 million cards during 2010, with the total number of cards in circulation now at a seven year low of 60 million.

The survey also highlights that there has been a sharp fall in unsecured borrowing generally with household borrowing having fallen by around £500 for each household over the past year. Unsecured borrowing is expected to fall by a further £200 per household in 2011, down between 2 and 3%, as UK consumers continue to pay back loans and credit card debts and those customers looking for new finance find it hard to get approval from the banks.

Analysts have suggested that amid recent VAT rate rises squeezing household incomes and continued economic uncertainty, people have decided to reduce their credit card debts rather than increasing their borrowing on their credit card.