• Credit card spending fell 45% in May compared to a year earlier
• People paid off their credit card balances in May, as lockdown savings continued
• Total card spend was £42bn – a 30% fall on May 2019
Laura Suter, personal finance analyst at investment platform AJ Bell, comments on the latest card spending figures from UK Finance:
“The continuation of lockdown in May meant that people managed to pay off their credit card debt rather than putting more money on plastic. The amount of debt on credit cards reduced in the month as people spent less and put some of their lockdown savings to work by paying off their debt. This continued the same theme that we saw in April, but repayments actually picked up in May as people were saving on commuting, going out and holiday spending.
“People also spent far less on their credit cards in May, with total spending of £9.6bn – a 45% drop on the same month last year. However, this was an increase on April’s spending of £8.7bn and shows that despite being housebound people were still willing to shop online.
“The nation is now in the deepest recession on record, meaning that many households will be happy that they recession-proofed their finances during early lockdown as tough times are ahead. We’re already seeing cheap credit cards deals withdrawn from the market, which means that those who have hefty credit card debt need to act quickly to switch to a cheaper deal before they disappear from the market. Getting your debt as cheap and your finances as lean as possible is the best way to ride out difficult economic times.”
