Outstanding credit card debt grows by nearly 10% in November
Credit card spending was 5.3% higher in November when compared with the previous year, while outstanding debt rose by 9.4%.
There were 355.1 million credit card transactions in November, 0.3% more than in November 2021, according to figures from trade body UK Finance.
These transactions meant both spending and outstanding debt rose in November compared to the previous year.
The total spend on credit cards was £19.6bn. 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.
This indicates that the cost-of-living crisis is cutting deeper as more borrowers are forced to rely on credit for everyday expenses.
More than half (50.9%) of outstanding balances incurred interest, down slightly from 52.9% twelve months ago.
UK Finance also reported there were 2.1 billion debit card transactions in November, 8.1% more than in November 2021. The total spend of £66.6bn was 5.3% higher than November 2021.
Savings gone, no buffer left
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.”
Contactless on the rise
Meanwhile, UK Finance also reported that contactless payments were on the rise.
According to the trade body, contactless payments accounted for 60% of all credit card and 74% of all debit card transactions.
There were 1.5 billion contactless card transactions in November, 13.5% more than the 1.3 billion in November 2021. The total value of contactless transactions was £22.9bn in November, a 29.4% increase on £17.7bn in November 2021.