Credit Card Debt Falls

The British Bankers Association (BBA) said this week that consumers are starting to pay off credit card debt for the first time since May 1994.

UK credit card holders paid off £40 million more than they were spending in the last six months, as well as new card debt slowing. The six monthly average for new credit card debt has fallen from £0.5 billion last August to £0.2 billion in April.

These figures mirror the image that consumers are becoming more cautious when it comes to spending. Falling retail sales in the High Street and consumer confidence are apparent in the economy as households look to tighten their belts following five interest rate rises since November 2003.

However, while credit card spending has fallen, personal loan and mortgage borrowing has risen. Personal loan and overdraft debt rose by £451 million in April.