According to the most recent figures from The Bank of England, credit card lending rose by 9.2% in the year to September up from 8.9% in August.
This has taken the total amount
held by borrowers to a staggering £69.4 billion.
The Bank of England has cautioned that the UK banking system could experience consumer credit losses of £30 Billion if there was another economic downturn.
The growing reliance by consumers on credit has led to the highest debt levels in recent history.
Over 6 million Brits believe they will never be mortgage free. According to research from comparethemarket.com 62% Brits admit to being worried about personal debt levels.
Gillian Guy, chief executive of Citizens Advice, said: “The rise and rise of consumer debt is a cause for alarm at a time when large numbers of people are already in financial difficulty.
“The Financial Conduct Authority must step in to curb the worrying rise in debt – by banning credit card firms from pushing more credit onto people who haven’t asked for it, and compelling them to offer support sooner when it’s clear people can’t pay.
“The FCA’s own research shows that eight million people are already struggling with debt – leaving them vulnerable to falling into a debt spiral should interest rates rise or a life change sets them back on their repayments.
“It’s essential that the regulator and credit card companies act together to prevent people getting stuck with ever-growing debts that they can’t afford to repay.”
While having a credit card can be a cheap and convenient way of paying for goods over a short term, it can work out expensive if you don’t pay off the whole amount each month.
Applying for credit cards on a regular basis over a short term can also affect your credit rating, each time you apply for a credit card it will be recorded on your own personal file which in turn can mean being declined for a loan as providers will assume you have multiple cards already