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Michael Brown

Acting Editor
Published: 30/03/2022
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Consumers borrowed an additional £1.9 billion in February, of which nearly 80% was used on credit cards.

UK consumers took on an additional £1.5 billion in credit card borrowing in February, taking the total credit card amount borrowed to £59.5 billion. According to the Bank of England (BOE), this is the highest since records began in 1993.  

“The nation is clearly already feeling the effects of the cost of living crunch, with credit card use soaring in February as rising prices push more people into debt,” said Laura Suter, Head of Personal Finance at AJ Bell.

This means credit card borrowing increased 9.4% across the past year, while the borrowing for consumer credit overall increased 4.4% over the same period.

In total, consumers borrowed £1.9 billion across February, committing £400 million to other forms of consumer credit such as personal loans and car financing.

“The total amount that we borrowed in the month was more than double the pre-pandemic average and shows just how soaring prices are affecting people’s pockets,” said Suter.

“What’s more, the £1.5 billion put on credit cards in February is equal to the previous five months’ combined, and is a far cry from the peak of the pandemic savings where the nation paid off almost £5 billion in credit card debt in a single month,” she elaborated.

Money out of the savings pot

This February, consumers added £5.1 billion into their savings accounts for the month. Specifically, £4 billion was saved with banks and building societies while £1.1 billion was stashed away with the National Savings and Investments (NS&I).

This was lower than last year’s monthly average net flow of £5.5 billion.  

“We’re a far cry from January and February last year, when we saved more than £18 billion across the two months, compared to just over £5.5 billion this year,” said Suter.

It is a view shared by Sarah Coles, Senior Personal Finance Analyst at Hargreaves Lansdown, who believes savers stuck on low-paying rates should consider their options.   

“If your money is still sitting in a miserable high street easy access account earning 0.01%, now really is the time to consider a move,” she said.

In fact, according to our Finance Expert, Rachel Springall, savers could earn £198 more in interest by ditching their 0.01% rate for a 1.00% account on a £20,000 sum.

“As the biggest high street banks fail to pass on the full rises to their customers, and some pay as low as 0.01% in interest, it would be sensible for savers to ditch and switch,” she said in an article published on our site.


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