Card borrowing increased 5 percent in 2009


Credit card borrowing reaches new heightsCredit cards have increasingly become a way of life in the UK in recent years. Indeed, figures from Apacs suggest that there were more credit cards (71.3m) than people (about 60 million) in the country at the end of 2008. Here, takes a look at some of the latest industry figures and trends.

The Apacs statistics show that there were 146.3m debit, credit and charge cards in circulation throughout the UK at the end of 2008. In addition, the body noted that the third quarter of last year saw Britons make an average of 254 plastic card purchases every second, amounting to a combined expenditure of £12,367 per second. There were also 94 cash withdrawals per second during the three-month period, which equates to £6,233 being taken out of the nation's 63,400 ATMs every second.

The current average interest rate on credit cards is 18.24%, whereas the Bank of England's base rate is at a historic low of 0.5%. PricewaterhouseCoopers revealed in its new 'Precious Plastic 2010' report that average borrowing per credit card increased by 5% last year, surpassing £1,000 for the first time ever.

Meanwhile, figures from the British Bankers' Association suggest that the total credit card debt in the UK reached £60.4bn in March 2010. The collective credit limit on these cards was found to be £158bn, which means the average cardholder has a credit limit of £5,129. In addition, the body claimed that the proportion of credit card balances which bear interest at present is 68%.

The findings detailed above have been given further credence by the latest statistics released by Credit Action. The debt charity announced that total UK personal debt stood at £1,460bn at the end of March 2010. If this figure is to be believed, it means that Britons owe more to lenders than the entire country produces in a year. Credit Action also calculated that the annual growth rate of consumer credit during the month was 0.4%, taking the nationwide total to £222bn.

According to the new data, Britons' interest repayments on their personal debt totalled £67.8bn in the past year, which means the average household forked out £2,692. Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans was found to have risen to £4,593 per UK adult by the end of March 2010.

Evidence suggests credit cards are still irrevocably intertwined with the way Britons conduct their everyday lives. As a result, it is now more important than ever for each individual to compare credit cards to find the most appropriate one for their needs, while also ensuring they use them responsibly to avoid serious financial problems.

Published: 7 May 2010