Credit card lending is growing at its fastest rate for more than a decade, according to the Bank of England’s (BoE) money and credit statistics for April this year.
The central bank found credit card lending had grown to £68bn in April 2017 – a near 10 percent increase compared to this time last year.
Mike O’Connor, chief executive of StepChange Debt Charity, who will step down later this year, said there are already 3.3 million 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”.
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 which are secured on “dwellings” and 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, which is outstanding on 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 total, £68bn is credit card debt and £130bn comprises debt from loans and other advances.