Britons’ credit card debts have touched record £17.1billion with shoppers warned over ‘borrowing binges’ during Christmas
Consumers racked up a record £17.1billion of credit card debt last month amid fears a growing number rely on them for everyday purchases.
Statistics from UK Finance, which represents High Street lenders, revealed monthly credit card spending was 11.6 per cent higher than a year earlier.
With Christmas just weeks away, charities have warned families they risk getting stuck in a debt trap if they go on a borrowing binge and their circumstances suddenly change.
Separate figures published by Lloyds Banking Group revealed some 60 per cent of people who are not saving feel they have no money to spare.
Justin Modray, of Candid Financial Advice said shoppers should be very careful to keep tabs on their spending and ensure they do not borrow more than they can afford to pay off.
Justin said interest rates on some credit cards can be sky-high, so one should only be using them to make everyday purchases if one is comfortable to be able to repay it. The risk is ending up building a large amount of debt over time.
Debt charity Stepchange has warned the rise in credit card spending could be storing up problems for the economy.
Senior public policy advocate, Grace Brownfield said unless someone’s income increases soon afterwards, the routine use of credit for everyday living expenses can trap people in a bigger debt burden very quickly.
Grace Brownfield said if people struggle to pay essential bills one month, they may well struggle the next month, and so on, as the high interest and charges from borrowing credit builds up on top of their bills.
Creditors, utilities providers and landlords may be paid for now but it is unlikely to be sustainable and may be storing up problems for customers in the future.
The figures also revealed Britons put away less than £100 each on average in the past year in a stark illustration of the country’s savings crisis.
An extra £6.3billion was added to personal deposits in the year to October, or just £96 each. This is the lowest savings rate since 1999.