Credit card borrowing shoots up

CREDIT card borrowing has been rising at the fastest level since the boom years, figures from the British Bankers’ Association (BBA) showed yesterday.

Lending shot up 5.5 per cent in the 12 months to April, a rate of growth last seen in 2008.

And the total amount outstanding in credit cards stands at £57.7bn, up £1.5bn on the year and at its highest level since late 2011.“Our figures provide further support to the case that British consumers are becoming more confident about the recovery,” said BBA economist Richard Woolhouse.

Credit card borrowing has been accelerating for the past two years, after dropping briefly in 2011 and 2012.

However, credit expansion is not yet back at its pre-crisis peak – back in 2005 lending rocketed by more than 15 per cent per year.

In April alone, 198m transactions were carried out on credit cards, up three per cent on the year.

But the amount borrowed dipped, as the amount paid came in at a total of £11.6bn, down one per cent on the same month of 2013.

Despite the high total outstanding on cards, no interest is paid on 40 per cent of the debts thanks to zero-interest deals.