Credit card debt hits £60bn four-year high

A BOOM in credit card spending has pushed debt levels to a fouryear high.

The total owed on plastic is almost £60billion, in a sign that families are feeling confident about the economic recovery.

UK consumers own 59million credit cards, according to the British Banking Association.

The number of card transactions in November was also 6 per cent higher than in the same month a year before.

It comes days after a separate Bank of England report found consumers’ appetite for spending using credit cards and personal loans has risen at its fastest pace since records began.

Yesterday, experts said the boom was a sign that consumers felt more optimistic about their future finances.

Richard Woolhouse of the British Banking Association said: ‘Consumer spending looks well set for a strong year. With unemployment continuing to fall, many of us seem to believe 2015 will be a year where we can spend with greater confidence – that’s good news for the wider economy.’

He pointed out that there are many interest-free deals on offer, adding: ‘Attractive financial deals are even more appealing when you feel more optimistic about your economic future.’

The British Banking Association said that four in ten credit card balances currently do not incur any interest charges – the highest proportion since records began in 1995. The latest figures cover the worldwide transactions of UK residents who use cards issued by 25 leading institutions.

Meanwhile, the Bank of England report said lenders had increased their appetite for risk, meaning more credit was available. It said banks and other lenders had run successful marketing campaigns to drum up business and loosened their credit scoring criteria, which had l ed to an i ncrease in approvals.

News of the rise in credit card spending follows a pre-Christmas splurge by millions of Britons after shops lured in customers with early sales.

An estimated £810million was spent online on November 28, known as Black Friday, according to internet retail experts IMRG.

Around £650million was spent three days l ater, on Cyber Monday. New car sales also hit a ten-year high in 2014, with almost 2.5million changing hands.

‘Spending with confidence’