UK Credit Card Borrowing Grows at Fastest Pace in Nearly Two Years
Credit card borrowing in the UK increased at its fastest yearly rate in almost two years in November, according to new figures from the Bank of England. Many households borrowed more money to cope with rising living costs and to pay for Christmas spending.
The Bank of England said people borrowed an extra £2.1 billion in consumer credit during November. This was higher than the £1.7 billion borrowed in October. Consumer credit includes credit cards, personal loans, and finance offered by car dealers.
Out of the total amount borrowed, £1 billion came from credit cards alone. This was up from £700 million the month before. Borrowing through other types of consumer credit also increased slightly, rising by £100 million to reach £1.1 billion.
On an annual basis, credit card borrowing grew by 12.1% in November, compared to 10.9% in October. This was the highest annual growth rate since January 2024.
Experts believe the rise shows that people are relying more on borrowing during the busy pre-Christmas shopping season. Many households are struggling with higher prices and are turning to credit to cover daily expenses and festive costs.
Simon Trevethick from the debt charity StepChange said the figures show how difficult everyday life has become for many families. He explained that many people now find it hard to manage basic costs without using credit cards or loans.
He also said the increase may be linked to Christmas spending. StepChange’s research found that 14 million people expected to struggle to afford Christmas, showing how much pressure households are under.
Even though the UK’s inflation rate dropped to 3.2%, it is still higher than the government’s 2% target. Prices remain much higher than they were in previous years. Shoppers also paid more for festive food and treats than last Christmas, mainly because of earlier sharp rises in food prices.
Separate figures from the British Retail Consortium (BRC) showed that shop prices rose by 0.7% in December, slightly higher than 0.6% in November. Food prices increased faster, rising by 3.3%, compared with 3% the month before.
This rise in food prices was partly balanced by falling prices for non-food items such as clothes and electronics. Non-food prices fell by 0.6% compared with the same time last year, as retailers offered heavy discounts to attract shoppers.
Helen Dickinson, chief executive of the BRC, said shoppers were still able to find good deals on many Christmas essentials. Items such as vegetables, cheese, and alcohol were available at reasonable prices. She also said there were many promotions on popular gift items like toys, books, and home entertainment.
However, consumers were cautious about spending toward the end of 2025. Many were worried about possible tax increases in Chancellor Rachel Reeves’s autumn budget. Official data showed retail sales volumes unexpectedly fell by 0.1% in November. Research by KPMG also found that concerns about the economy made people less willing to spend.
Some economists believe the rise in borrowing could be a sign that people felt slightly more confident about using credit to spend. At the same time, households increased their savings. Bank deposits grew by £8.1 billion in November, up from £6.7 billion in October.
Mortgage activity, however, slowed. Net mortgage approvals for house purchases fell by 500, bringing the total to 64,500 in November. This reflected a slowdown in the housing market ahead of the budget.
Alex Kerr, an economist at Capital Economics, said the rise in bank savings may show people preparing for possible tax changes. Still, the increase was much smaller than the £20.2 billion rise in deposits seen the month before.
He added that worries about tax rises did not stop people from borrowing in November. Overall, he said, the data suggests limited chances of strong consumer spending growth in 2026.
Published: 6th January 2026
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