Black Friday blowout risks credit crisis
In the week to 2 December, including Black Friday, we spent 121% of the pre-COVID average on credit and debit cards.
This is up 15 percentage points from the previous week, and is at its highest level since before the first lockdown.
The increase in card spending was largely focused on common Black Friday purchases, including those considered ‘delayable’ (up 27%) which includes things like clothes and homewares, and those labelled as ‘staples’ (up 17%) which includes food and drink.
Economic activity and social change data from the ONS was out today: Economic activity and social change in the UK, real-time indicators – Office for National Statistics (ons.gov.uk)
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “Plastic was back in fashion for a Black Friday blowout. Spending on cards hit its highest level since before the first lockdown last year. If you overdid things on Black Friday, it’s not too late to cut back on your festive spending and save yourself from a credit hangover in the new year.
“The biggest rise during the week was in spending classed as ‘delayable’, which includes a lot of the fashion and homewares that were discounted during the sales. So there’s every chance that much of this spending on cards was on treats and gifts.
“It’s not the first sign of the return of debt. The figures come hot on the heels of Bank of England figures that showed we borrowed another £700 million in consumer credit in October, including £600 million more on credit cards. This was the largest amount of card borrowing since July last year.
“Some of our Black Friday blowout was on debit cards, and some will have been planned for carefully and comfortably affordable. However, there’s always the risk that the sales event persuaded people to spend more than they could afford on things they didn’t need.
“If you’re recovering from a Black Friday splurge, it’s important to take stock of where you stand. If you’ve bust the budget buying treats in Black Friday, don’t feel compelled to go further into debt buying presents for everyone else.
“There are plenty of alternatives to hitting the shops. You can talk to friends and family and agree to skip presents for a year, or just buy for children. Alternatively, you can agree to home-made gifts, or a secret Santa, so you only need to buy for one person. If push comes to shove you can agree to meet in the New Year and either pick something up in the sales, buy with your next pay packet, or even regift something you got for Christmas.”
