Credit card debt growing at fastest rate since 2006
Credit card lending is growing at its fastest rate since 2006, according to the Bank of England’s money and credit statistics for April.
It found credit card lending has grown to £68bn in April 2017 compared this time last year – a near 10 percent increase.
Mike O’Connor, chief executive of StepChange Debt Charity, said there is already 3.3m people in persistent credit card debt and the nation’s credit card bill is growing rapidly.
He said: “Credit cards are designed to be a short-term product, but for many people they have become an expensive, long-term form of borrowing.
“As lending continues to grow strongly two things must be addressed. What can be done to help borrowers who fall into persistent credit card debt? And, critically, what are the product features of credit cards that need to change to stop them trapping so many people in unaffordable, long-term and persistent debt? It is not clear that the Financial Conduct Authority’s current proposals sufficiently answer these questions”.
Last week StepChange announced O’Connor, who has been with the free advice charity for nearly four years, would be leaving the organisation later this year.
The BoE data also found the collective amount of consumer debt outstanding, as of April this year, is £1.5trn. This amount consists of debts owed which are secured in dwellings and from consumer credit products.
Of the amounts owed in regards to dwellings, this includes house purchases and remortgaging, the figure outstanding is £1.3trn.
The remaining debt owed by consumers is £198bn from consumer credit products such as credit cards and loans. The amounts owed in this category have increased by 10 percent compared to April last year.
Of the consumer credit, £68bn is credit card debt and £130bn is debt from loans and other advances.