UK credit card debt up 9.7%

The amount owed on UK credit cards increased last year as household finances came under pressure from high inflation.

Outstanding balances on credit card accounts grew by 9.7% in the 12 months to December 2023, according to new data from UK Finance.

In December there were 371.4 million credit card transactions, 3.8% more than in December 2022, suggesting that consumers are turning to debt to cover their spending amid the cost of living crisis.

There were also 2.28 billion debit card transactions, a rise of 2.3% compared with the same month a year earlier.

Total spending on credit cards was up 3.7% year-on-year in December to £19.2bn, while the total amount spent on debit cards dropped 1.4% to £68.4bn.

At the start of March, the Financial Ombudsman Service reported that credit card complaints had hit an all-time high.

Consumers lodged 5,660 complaints about their credit cards in October to December 2023 — the highest ever recorded for a three-month-period.

“Owing significant amounts of debt can be stressful and it’s important that consumers are treated fairly and transparently by financial service providers,” said Abby Thomas, chief executive and chief ombudsman of the Financial Ombudsman Service.

“Lenders have a duty to support their customers whatever their circumstances and are obliged to help people who are struggling with debt.”