• Amount owed on credit card hits record level at £44.8bn
• People stashed more into savings accounts in 2018
Laura Suter, personal finance analyst at investment platform AJ Bell, comments on the latest household savings figures:
“Credit card borrowing hit its highest level since records began in December, with £44.8bn outstanding on the cards. The total amount owed on credit cards is now more than double the figure at the turn of the century, and hasn’t been this high since UK Finance started gathering the data in 1997.
“The total amount borrowed on credit cards in 2018 also rose by around 6% when compared to the previous year. However, these latest figures also highlight that we are increasingly changing the way we spend as a nation.
“More Brits are using their credit cards as a payment method and paying off the balance each month, in order to benefit from the cashback or other perks a number of cards offer. This shows that some spenders are being savvy and getting the most out of their spending. But spenders are split in two, as the total debt we owe as a nation on credit cards continues to grow, with interest racking up for those who can’t afford to pay off their balances or switch to a better rate.
“The figures also highlight a shift in the way we are borrowing, as the amount people borrowed in their overdrafts dropped in the year by more than 3%, while the amount owed in personal loans fell by more than 5%.
“A bright spot in the figures is that over the year people put more away for a rainy day, with the total amount held in savings accounts up around 2% on the year, taking the total to just over £1.5bn held in savings accounts at the end of the year. The amount held in easy-access accounts continued to march higher, with much of that in accounts that is earning less than the current rate of inflation, meaning savers are losing out in real terms.”