UK credit card borrowing has surged at its fastest annual rate in nearly two years, according to the Bank of England, with households resorting to debt to keep up with rising living costs and Christmas expenses. In November, individuals borrowed an additional £2.1 billion on consumer credit, a 12.1% increase from October's £1.7 billion rise.
The sharp uptick in borrowing is largely attributed to the pre-Christmas shopping period, as households struggle to cope with mounting pressure from inflation and rising everyday costs. This sentiment was echoed by Simon Trevethick of StepChange debt charity, who suggested that many households are finding it increasingly difficult to manage their finances without relying on credit.
The Bank of England's figures also show a significant rise in borrowing using other forms of consumer credit, including car dealership finance and personal loans, which increased by £100 million to £1.1 billion in November. The annual growth rate in credit card borrowing has not been seen since January 2024.
While the UK's inflation rate has dropped back to 3.2%, it remains above the official 2% target, and consumers faced higher prices for festive treats compared to last year, after a sharp rise in food prices. Retail sales volumes unexpectedly fell by 0.1% in November, amid concerns over tax increases and economic uncertainty.
Economists suggest that the growth in consumer credit may indicate an early increase in household confidence to use borrowing to finance spending. However, households are also reorganizing their finances ahead of expected tax changes, with bank deposits increasing by £8.1 billion in November, a smaller rise than in October 2024 before the chancellor's first autumn budget.
The data paints a mixed picture, with consumers increasingly turning to credit to cope with living costs but also showing signs of caution ahead of tax increases and economic uncertainty. The Bank of England's figures suggest that households are seeking to stabilize their finances amidst rising expenses, while also taking on more debt in anticipation of holiday spending.
The sharp uptick in borrowing is largely attributed to the pre-Christmas shopping period, as households struggle to cope with mounting pressure from inflation and rising everyday costs. This sentiment was echoed by Simon Trevethick of StepChange debt charity, who suggested that many households are finding it increasingly difficult to manage their finances without relying on credit.
The Bank of England's figures also show a significant rise in borrowing using other forms of consumer credit, including car dealership finance and personal loans, which increased by £100 million to £1.1 billion in November. The annual growth rate in credit card borrowing has not been seen since January 2024.
While the UK's inflation rate has dropped back to 3.2%, it remains above the official 2% target, and consumers faced higher prices for festive treats compared to last year, after a sharp rise in food prices. Retail sales volumes unexpectedly fell by 0.1% in November, amid concerns over tax increases and economic uncertainty.
Economists suggest that the growth in consumer credit may indicate an early increase in household confidence to use borrowing to finance spending. However, households are also reorganizing their finances ahead of expected tax changes, with bank deposits increasing by £8.1 billion in November, a smaller rise than in October 2024 before the chancellor's first autumn budget.
The data paints a mixed picture, with consumers increasingly turning to credit to cope with living costs but also showing signs of caution ahead of tax increases and economic uncertainty. The Bank of England's figures suggest that households are seeking to stabilize their finances amidst rising expenses, while also taking on more debt in anticipation of holiday spending.
- people in the uk are basically maxing out their credit cards just to get through christmas 
it's crazy how much pressure there is to keep up with costs and inflation right now 
i mean i guess it makes sense that people would turn to credit when they feel like they can't afford things anymore, but still...it seems like everyone's trying to make ends meet at the same time 
Credit card debt is getting outta control! 
£2.1 billion added in November alone, and it's not just the festive season that's causing people to take on more debt... 
It's like, households are struggling to cope with everyday costs, and credit just seems easier 
. But what about when those tax changes come? 
Will they be stuck with debt for good? 
... but one thing's for sure: we need to get our finances in check before it gets any worse! 
OMG, £2.1 billion in extra credit borrowed in one month is like, whoa! 
, but do we really need to go further into debt? 
The data shows that people are getting cautious ahead of tax changes 
️ #CreditCardDebt #HolidayShopping #FinancialStability
. I'm not surprised the borrowing is going up - people are trying to keep up with rising costs and Christmas expenses 
. But at the same time, it's like they're putting all their hopes on buying more stuff to feel better about themselves 
.
. We need more people who can say no to debt and yes to savings 
.
. IT'S LIKE THEY'RE PUTTING OFF PROBLEMS FOR NEXT YEAR AND IT JUST GETS CRAWLER LOANS AND CAR FINANCE DEALERShips INVOLVED 
just saw the latest UK credit card borrowing stats and I'm SHOOK 
people r really struggling to keep up with living costs rn 
And now we're seeing a big rise in car dealership finance and personal loans too? That's just crazy talk 
already this year is getting intense with inflation & christmas expenses... i'm like what's going on ppl? cant we just have a chill december for once lol meanwhile credit card borrowing is thru the roof 
, it's def making sense that ppl are using credit to keep up but at the same time its scary thinking about all that debt piling up 
? Like what even is the point of having a decent income if you're just gonna stick it all towards rent, bills, and groceries?! It's like we're all being slowly suffocated by the system 
but seriously, £2.1 billion extra borrowed in one month? That's a lot of debt to take on for what feels like just a season 
but shouldn't we be exploring other options? Like, have you seen those new budgeting apps that can track your expenses and help you save? 
!
. Like, remember when they showed those scenes in "The Secret Life of Walter Mitty" where Ben Stiller's character is always overspending and then has to deal with all this debt? Yeah, I feel like I'm living that life right now 
For real, the UK's inflation rate is still above target and people are struggling to make ends meet. Maybe this growth in consumer credit is a sign that we need more financial education or something... but at the same time, I do think it's interesting that households are increasing their bank deposits ahead of tax changes. Like, some people might be trying to stash away cash just in case 
. Now it seems like everyone's using it just to keep up with living costs. And Christmas expenses? Forget about it! It's like they're saying "oh well, I'll just put it on my credit card". What happened to saving up for a rainy day? 