Credit card balances grow as cost-of-living crisis continues

There were 355.1 million credit card transactions in November. This was 0.3% more than in November 2021. The total spend on credit cards was £19.6 billion. This is 5.3% higher than the previous year.

Outstanding balances on credit card accounts have grown by 9.4% over the twelve months to November. 50.9% of outstanding balances incurred interest compared to 52.9% twelve months ago.

UK Finance has issued card spending data for November 2022 Card Spending Update – November 2022.pdf (ukfinance.org.uk)

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown said: “Credit card spend is on the rise as the cost-of-living crisis continues to pummel our finances. We put £19.6bn on our credit cards in November as we look to manage increasing prices in the run up to Christmas. The big concern is that outstanding balances aren’t being paid off – these have grown 9.4% over the year in a sign people are struggling to make ends meet. Many people will have blown through their pandemic savings and with little if any buffer left, they are increasingly using their credit cards.

“However, there are signs people are looking to manage these balances. The proportion of outstanding balances incurring interest has gone down which could be a sign that people are looking at interest free balance transfers to mitigate interest payments and help them pay down any outstanding debt.”