Credit card borrowing spikes to highest level since 2004 ahead of Christmas

Consumer credit borrowing shot up in November with an additional £1.5 billion of consumer credit, driven primarily by credit card borrowing (£1.2 billion) which reached its highest level since 2004.

Commenting on today’s Bank of England data on consumer credit, Emma Steeley, CEO at Freedom Finance, one of the UK’s leading digital lending marketplaces, said: “After a couple of months of subdued volumes in the consumer credit sector, borrowing bounced back strongly in November with the highest credit card borrowing levels seen in nearly two decades.

“Households will have been feeling the pinch ahead of Christmas as the reality of the much-feared October energy price cap kicked in and the cold, dark weather increased domestic energy usage which will contribute to rising bills.

“With rates on borrowing becoming increasingly costly, it is vital that consumers with expensive debt look to consolidate to cheaper options as they reach the end of attractive, interest-free periods or face higher interest repayments on credit card debt built up over last year.

“It is important that everybody accessing the consumer credit sector is exercising best practise. Shopping around and taking advantage of the latest technologies means would-be borrowers can find the best rates available to them without fear of being rejected and damaging their credit score.”