The scale of consumer borrowing via credit cards increased sharply in November, according to the latest data from the Bank of England.
A total of £0.9 billion was borrowed by credit card users in the month, which represents the most debt taken on via credit cards in a single month since July 2020.
Credit cards are generally the most common form of debt that people have difficulties with when they find themselves dealing with problem debts.
Some analysts are worried that the increasing scale of credit card debt taken on in recent months reflects the mounting pressures that household finances are being put under with prices rising and incomes being squeezed.
The Bank of England’s official data also shows that there was a significant downturn in the amounts of money being set aside as savings in November, which is being taken as potentially a further indication that families are feeling the pinch financially.
“Even in November, before the main Christmas spending period, the rise in credit card borrowing is likely to be reflecting an element of financial pressure among some households,” explained Richard Lane from the debt help charity StepChange.
“Since this November data, the pressures have worsened so it is vital that policymakers are thinking ahead to help mitigate the risk of a rising debt crisis in 2022.”
StepChange’s concerns about rising credit card debt are based partly on the connection it sees first-hand between people with credit card debt and those with serious problem debts.
The charity’s own figures show that around two thirds of all its new clients have debt outstanding on at least one credit card.
That makes credit card debt the single most common issue that people have when they first reach out for third party advice on dealing with their debts.
Credit cards were also expected to be the form of debt most commonly used by people who borrowed money recently to cover their costs over the Christmas period.
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