Today’s UK Finance figures show credit card spending has risen considerably in May. This could be an indicator of affordability issues, which could have a knock on effect on people’s ability to keep up with rent and mortgage payments.
Mark Pilling, managing director at Spicerhaart Corporate Sales said: “UK Finance figures out today show that credit card spending was 2.3 per cent higher than a year earlier, with outstanding levels of card borrowing having grown by 5.7 per cent over the year. Credit card purchases in May were 193 million – this is well above the previous 12 month average of 181 million.
“While this could just be a good sign that retail sales are starting to pick up, perhaps as a result of the summer weather and the Royal Wedding, we all know the retail sector is currently struggling, so it could be an indicator of wider issues, that perhaps people are being forced to put more of their day to day purchases on credit cards.
“You can’t read an awful lot from one month’s data, but this is quite a significant rise and it will be interesting to see if this trend continues. If credit card debt does continue to rise, we need to be prepared for the knock on affect this may have on other areas, such as people’s ability to keep up with rent and mortgage repayments.”