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The UK Cards Association's response to The Independent headline article from 01.11.2011

Credit Card Debt – Correction to Figures

02 November 2011

Unfortunately Simon Read (“Britain plunges into credit card debt”) reaches entirely the wrong conclusion by taking a single figure out of context. Yes, credit card debt owed to six major British banking groups increased by £200m in September but this is not an unusual fluctuation in what is otherwise a long term decline.

At £57 billion, and accounting for less than 4% of UK consumer borrowing, credit card debt has fallen from a peak of £69 billion in February 2006, despite the economic downturn. In fact, a third of this debt does not attract interest – being either paid off in the month it is incurred (by the 62% of cardholders who pay in full each month and therefore not actually borrowing) or charged at 0%. To put this in context there is as much long term debt on student loans as there is on credit cards.

In the current environment people are becoming more cautious in their use of credit and, if they can, are trying to pay back their borrowings. Anyone who is turning to credit cards for everyday living or experiencing other financial difficulties should contact their credit card company or talk to one of the providers of free independent debt advice.

I have attached some further comments on the figures quoted in the article below.

Melanie Johnson
Chair, The UK Cards Association


  • Whilst there was a £200m increase in credit card debt in September (BBA Table 6 – Unsecured Lending NSA) this figure relates to the major British banking groups – a group of six (Santander, HSBC, Northern Rock, RBS, Barclays and Lloyds) that account for around 60% of the market – rather than the whole of the market. The whole of market figure (Bank of England series LPMVZQX) increased by £156 million.
  • Outstanding debt on credit cards has fallen steadily from a peak in February 2006 of £69 billion to £57 billion in September 2011 (Bank of England series LPMVZRJ, adjusted for securitisations prior to 2010).
  • The credit card interest rates quoted of 13.9% in Sep 2002 and 18.4% in Sep 11 are for ‘interest bearing credit cards only’ (Bank of England series CFHMSDG). The comparable figures for all credit cards are 11.6% and 11.4% (Aug 11) respectively (Bank of England series CFHMSDP) which tells the opposite story.
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