Credit card spending shoots up as customers turn to extra protections

UK credit card users spent almost nine percent more last month than the year before, as more customers start using credit as their go-to way of paying at the tills.

Britain’s £11bn of credit card spending last month rose 8.8 per cent year-on-year, while the outstanding level of credit card borrowing grew 4.7 per cent in 2018, new data from UK Finance show.

“Growth in credit card spending continues to be largely offset by increased cardholder repayments, with almost half of cards not bearing any interest at all,” said Eric Leenders, managing director, personal finance at UK Finance.

“This reflects the growing trend of consumers using credit cards as a preferred payment method rather than as a means of borrowing, in order to take advantage of additional protections and value-added benefits.”

Meanwhile high street banks approved 2.4 per cent fewer mortgages last month than in December 2017, the study found.

Approvals for home purchases increased 5.3 per cent, remortgage approvals fell 5.8 per cent and approvals for other secured borrowing plummeted by 18.9 per cent.

Leenders said: “Mortgage lending grew in December compared to the previous year, with borrowers defying seasonal trends and purchasing a property throughout the festive period.”