Consumer borrowing increases

Which forms of credit are consumers turning to?

The UK may be on the brink of a more sustained economic recovery, but it seems that consumers are still turning to credit to provide a boost for their household budgets.

The latest figures from the British Bankers’ Association (BBA) have revealed an increase in several areas of borrowing, including a 0.3% rise in unsecured debt in the first eight months of 2013.

Further figures from the BBA data revealed that credit card borrowing grew by a figure of 6.7% across the year, surpassing increases in personal loans and overdraft borrowing (up by 5.1%).

When these figures were broken down credit card spending was found to make up a large share of unsecured borrowing growth in August, with consumers putting a staggering £8.4 billion of purchases on their credit card during the month.

Commenting on the figures, BBA statistics director David Dooks, said “For the first time in four years, annual growth in household borrowing on credit cards and personal loans has turned positive and mortgages approved for house purchase are also at their highest level since 2009.”

Here are just some the forms of credit consumers in the UK have been utilising in recent months.

Concealed credit cards keep spouses in the dark

Recent research from Gocompare has revealed that some couples are keen to draw a dividing line between love and money, with 5% of those in a relationship owning a ‘hidden’ credit card that their partner has no idea about.

Of this group more than a quarter (26%) has kept their other half in the dark about as much as £1,000 worth of debt amassed on these cards. A further 8% had failed to inform their partners about credit card debt that had pushed past the £5,000 mark.

Commenting on the figures, Matt Sanders, banking and credit card expert at, emphasised the importance of couples ‘sharing the debt burden’.

“Financial independence is very important for some couples so it’s understandable that many want to keep their bank accounts and credit cards separate,” he said.

“But hiding credit card debt is another thing. Debt can be a damaging burden to bear, and there really is no need to keep it under wraps.

“Sharing the debt burden with your partners will surely make it easier to handle and also make it more likely that you won’t fall into that trap again.”

Consumers carry less cash as credit and debit card payments grow in popularity

With credit and debit cards accepted for even the smallest payments at a number of outlets, it’s no wonder that Brits’ pockets aren’t bursting to the seams with cash.

New research from thinkmoney revealed that just 6% of adults had cash on them when asked, with men carrying an average of £27.10 while women carried an average of just £20.50 in cash.

The figures also revealed that those consumers South East (£25.10 on average) compared to those in the North East (£18.70)

Ian Williams, director of communications at budgeting account provider thinkmoney, commented:  “There are very few places these days where you can’t pay with a debit or credit card. Even, taxis, pubs and parking machines often accept cards. And with the growing popularity of online and mobile payments, there is really less need to carry that ‘wodge’.”

Scots turning to credit to ‘keep a roof over their heads’

126,500 Scots (3%) have turned to credit to ‘keep a roof over their heads’, according to the latest figures from the Debt Advisory Centre Scotland.

When it came to the percentage of consumers who had used credit to pay their mortgage / rent in the last month, this was even higher in the 25 to 44 age group (6%).

Ian Williams of Debt Advisory Centre Scotland argued that there are a number of ways that Scots can trim their expenses in order to meet monthly rent and mortgage commitments.

“Our experience has shown that many people struggle with their rent or mortgage because they’re spending too much on other things. Downsizing isn’t necessarily the answer, as there are ways to cut other expenses, from food and utility bills to the cost of repaying unsecured debts.”