Additional £9bn to be borrowed on credit cards over next six months

The UK is set to borrow an additional £9bn on credit cards over the next six months to survive the cost-of-living crisis, a new report by subscription lender, Creditspring, has suggested.

According to the most recent figures published by the Bank of England, individuals in the UK are currently borrowing £1.5bn every month on credit cards. This borrowing is projected to increase the UK’s total credit card bill by 18% to £68.9bn as living costs and inflation soar.

Given these figures were announced before Russia’s invasion of Ukraine pushed energy prices up, Creditspring suggested that borrowing is likely to increase in the coming months, with the lender’s research indicating that credit cards remain the most popular form of borrowing.

Monthly debt repayments have jumped 9% in a year and the total balance of unsecured loans among people applying for credit has increased by 13% year-on-year, according to Creditspring’s customer application figures.

While the rising cost-of-living is piling pressure on households across the UK, the lenders research also highlighted its impact on vulnerable households and younger people. One in four (39%) people living on incomes under £10,000 per year are “terrified” for their financial future, the study found, while almost half (46%) of 18 to 34 year-olds said the same – a figure up from 29% last year.

“Credit cards are going to provide a lifeline for borrowers over the next few months,” said Creditspring co-founder and CEO, Neil Kadagathur. “However, with millions reliant on borrowing to survive, credit cards with high repayment terms and large risk of debt spirals are a high-risk option that could lead to increased debt for many households.

“With millions across the UK having no option but to borrow if they’re going to survive what will be an incredibly tough few months, ensuring that all households have access to affordable credit is vital.

“Currently, there are up to 15 million people in the UK struggling to access mainstream credit options – these are the individuals most at risk from unscrupulous lending practices and falling into debt. Lenders have to offer more support to borrowers and step up to offer the support that will be a lifeline over the next couple of months.”

    Share Story:

Recent Stories


Helping landlords make their cash work harder
MoneyAge Editor, Adam Cadle, talks to Family Building Society BDMs, Arif Kara and Nathan Waller, about the resilient BTL market, the wide variety of landlords that Family Building Society caters for, and how niche products like an Offset mortgage can help improve cashflow.

An outlook on the BTL market
MoneyAge Editor, Adam Cadle, talks to Landbay senior regional account manager, Alex Witham, about current market sentiment within the BTL space and Landbay’s success in this area

Empowering advisers: A decade of education in Later Life Lending with Air Academy
Michael Griffiths is joined by chairman of Air Club and former founder and CEO of Air, Stuart Wilson, and head of the Air Academy, Daniel Holden, to look back on a decade of business focused learning at the Air Academy.


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.