Credit card borrowing up in December


Credit card spending upNew borrowing on credit cards increased by £195m in December, according to new figures released February 1, 2010.

For five consecutive months between July and November last year, the Bank of England found that repayments outstripped new unsecured consumer credit.

However, the central bank's latest report suggests that consumer credit increased by £52m in the final month of 2009, largely due to increased credit card lending.

Andrew Goodwin, of auditors Ernst and Young, explained that the rise can largely be attributed to the rush of spending ahead of the Christmas period. "The small increase in consumer credit is likely to be connected to consumers bringing forward purchases to avoid the VAT increase and a relapse is likely next month," he said.

The latest figures also indicated that total net lending to individuals increased by £1.2bn, which was almost double the average for the previous six months.

Last week, the Finance and Leasing Association suggested that total credit card borrowing fell by 2% to £2.67bn in November.ADNFCR-2308-ID-19593021-ADNFCR

Published: 5 February 2010