Confident shoppers get more credit cards before Christmas

 
Tim Wallace
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As the economy grows and unemployment drops, shoppers are happier to use credit cards
Britain's upbeat shoppers are taking out more credit cards, according to the British Bankers’ Association (BBA), indicating they feel increasingly financially secure.

The total number of cards in use has risen to 59.7m, the highest level for four years.

Shoppers had cut down credit card use in recent years, as part of their own response to the crash by cutting down expensive borrowing, and partly as lenders tightened the affordability criteria for receiving a card.

There were 214m credit card transactions in September, up nine per cent on the year. And total credit card balances rose 3.2 per cent on the year to £58.9bn.

However, shoppers are also paying off their debts more quickly when they use the cards, and are looking for better deals. The proportion of balances bearing interest fell from 62.6 per cent to 58.1 per cent.

“When we feel more secure in our jobs and optimistic about the economic outlook, we are more likely to take on more credit. So it’s pleasing to see that the number of cards in issue is now higher than at any time for four years,” said BBA chief economist Richard Woolhouse.

“But there are also a lot of lenders offering zero per cent rates and interest-free periods at the moment. It’s very striking that as much as 42 per cent of all lending on credit cards does not incur an interest charge. Such deals will clearly make this type of borrowing much more attractive to customers.”

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