Annual growth in credit card debt surges to 12-year high
Credit card debts surged at the fastest annual rate in 12 years in February, figures from a trade association show.
Total market credit card figures from UK Finance show annual growth of 8.3% in the amounts of credit outstanding - the highest figure since 2006.
UK Finance also released separate figures for high street banks, which showed slower annual growth of 6.3% in outstanding levels of card borrowing.
Eric Leenders, managing director, personal finance at UK Finance, said the body is seeing a continuing rise in credit card spending, reflecting the growing number of transactions carried out using cards, while other forms of borrowing such as overdrafts continue to fall.
There were 220 million credit card transactions in February, UK Finance's figures show.
The rise in convenience of contactless payments has seen the popularity of plastic in wallets grow in recent years.
But there have also been concerns that some households could be in danger of over-stretching their borrowing.
The Financial Conduct Authority (FCA) has recently been looking into the range of lenders who make up the high-cost credit market.
Tashema Jackson, a money expert at uSwitch.com, said the growth of outstanding credit card debt could be a "wake up call" for those reliant on their credit cards to make up the shortfall on their essential household purchases.
She said: "When it comes to repaying your credit card debt always try to make more than the minimum repayment. It can make a lot of difference in the long run."
The high street banking figures also showed the number of mortgage approvals being made to home buyers dipped in February.
Some 38,120 home loans got the go-ahead for house purchase, compared with 40,031 in January, according to figures from trade association UK Finance.
But re-mortgaging was up slightly, with 28,607 loans in February, compared with 28,327 in January, as households made the most of the low mortgage rates still available.
Howard Archer, chief economic adviser at EY ITEM Club, said: "Lenders have been reining in the amount of unsecured (non-mortgage) credit available to consumers and tightening their lending standards."