Slowdown in UK credit card debt growth, but over-55s still affected

There were 290 million transactions on UK cardholders’ credit cards in August this year, 3.8% more than the same month in 2018, new UK Finance statistics revealed.

The latest figures reflected a total spend of £16.3bn, which was similar to the same period in 2018.

UK Finance also revealed the annual growth rate of outstanding balances on credit cards stood at 3.6% in August 2019, which continued the downward trend from its recent peak of 8.3% at the start of 2018.

Commenting on the latest statistics, Dave Harris, CEO at equity release lender more2life, suggested the slowdown in credit card debt growth reported by UK Finance had not affected those in credit card debt over the age of 55.

“While the annual growth rate of credit card debt has slowed, the reality is that some consumers are still turning to unsecured forms of borrowing to help make ends meet,” Harris said.

“In particular, an increasing number of older consumers are using their credit cards to make up the shortfall between their expenditure and income. At more2life, we found that the proportion of over-55s with credit card debt has actually increased by almost a fifth over the last 12 months, and nearly a third of this age group borrow to cover day-to-day expenses.

“Shrinking pension pots, coupled with the changing demands of retirees are no doubt contributing to this reliance on unsecured borrowing. This is particularly concerning given the high levels of interest rates normally associated with credit card borrowing.

“On top of this, minimum monthly repayment requirements on unsecured loans could be crippling for those on small, fixed retirement incomes. For these consumers, knowing there are other lending options available to them, should they need to repay or manage debt, is vital.”

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