The average credit card balance in January 2008 of £2,168 was 25% lower than the previous year, according to financial website Moneyextra.

The research from Moneyextra showed January 2007’s average outstanding balance of £2,901, and January 2005’s average was £3,411, pointing towards a gradual reduction in the British public’s credit-card spending habits.

Robin Amlot, spokesperson for Moneyextra, said: “There is a clear trend of falling outstanding credit card balances over the course of the last three years. The question is whether this actually reflects consumers clearing debts or merely a rescheduling of them.”

He added that although some consumers are likely to be paying down their credit cards, others have probably been rescheduling expensive high-interest rate short-term credit card debt onto longer, structured loan products with lower interest rates.

“This means they will have been able to reduce their monthly outgoings but potentially at the expense of a much larger interest rate bill over the whole course of the loan repayment,” Amlot concluded.