UK credit card borrowing sees fastest annual growth rate in nearly two years as households take on debt to cope with Christmas expenses.
According to the Bank of England, credit card borrowing surged by £2.1 billion in November, the highest annual growth rate since January 2024, with net borrowing through credit cards reaching £1 billion and rising from £700 million a month earlier. The jump in borrowing is attributed to households taking on debt to finance the cost of Christmas as everyday expenses become increasingly difficult to manage without credit.
Experts warn that the figures may reflect people struggling to cope with the cost of living, with 14 million people unable to afford Christmas according to recent polling by StepChange debt charity. This sentiment is further reinforced by rising inflation rates, which have fallen back to 3.2% but remain above the official target and significantly higher than in recent years.
Retailers, however, report a more optimistic picture, with shop price inflation increasing to 0.7% in December from 0.6% in November, largely due to a rise in food prices. Discounts and promotions were also widespread across popular categories, helping households enjoy the festive season.
The growth in consumer credit may indicate an early rise in confidence among households to use borrowing to finance spending, but it's unclear how long this trend will last. Meanwhile, a rise in bank deposits by £8.1 billion in November suggests that people are reorganising their finances ahead of tax changes in the chancellor's budget, adding fuel to speculation about tax rises.
Despite this, economists argue that the increase in borrowing may not be enough to boost consumer spending in 2026. The consultancy Capital Economics notes that speculation about tax rises did not significantly impact households' spending decisions, and the evidence suggests there is little scope for a pickup in consumer spending in the near future.
According to the Bank of England, credit card borrowing surged by £2.1 billion in November, the highest annual growth rate since January 2024, with net borrowing through credit cards reaching £1 billion and rising from £700 million a month earlier. The jump in borrowing is attributed to households taking on debt to finance the cost of Christmas as everyday expenses become increasingly difficult to manage without credit.
Experts warn that the figures may reflect people struggling to cope with the cost of living, with 14 million people unable to afford Christmas according to recent polling by StepChange debt charity. This sentiment is further reinforced by rising inflation rates, which have fallen back to 3.2% but remain above the official target and significantly higher than in recent years.
Retailers, however, report a more optimistic picture, with shop price inflation increasing to 0.7% in December from 0.6% in November, largely due to a rise in food prices. Discounts and promotions were also widespread across popular categories, helping households enjoy the festive season.
The growth in consumer credit may indicate an early rise in confidence among households to use borrowing to finance spending, but it's unclear how long this trend will last. Meanwhile, a rise in bank deposits by £8.1 billion in November suggests that people are reorganising their finances ahead of tax changes in the chancellor's budget, adding fuel to speculation about tax rises.
Despite this, economists argue that the increase in borrowing may not be enough to boost consumer spending in 2026. The consultancy Capital Economics notes that speculation about tax rises did not significantly impact households' spending decisions, and the evidence suggests there is little scope for a pickup in consumer spending in the near future.
i mean, who needs financial stability when you can have discounts on food prices? 3.2% inflation rate? that's still pretty low if you ask me... but seriously, it's crazy how people are taking on debt just to survive during the holidays. maybe we should start a new tradition - christmas debt! 
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I'm getting super worried about all these credit card borrowing numbers... it's like people are just putting off their financial struggles until after Christmas 
. We need to talk about this inflation rate thingy, 3.2% is still pretty high and it's not helping. And what's up with all the tax speculation? People reorganizing their finances ahead of a potential tax rise doesn't sound like a confidence boost to me 
. Retailers are reporting shop price inflation at 0.7%, that's actually kinda good, but I'm still thinking we need some real action on this debt thing... 
What if they can't pay it back? It's like putting all your eggs in one basket, you know? 
And with inflation still going strong, it's like they're taking on even more risk. I hope people are thinking twice before signing up for those credit cards or loans.
. They're seeing shop price inflation go up and all, but that doesn't mean people are gonna keep spending like there's no tomorrow 
. I've seen friends struggle to make ends meet, let alone afford Christmas gifts or whatever. It's a tough time for some folks.
, but I think we need to be careful about how much credit people are taking on. They might think they can handle it now, but trust me, things change fast 
and yeah, it's not just christmas either, everyday expenses are getting harder to manage without some credit assistance... maybe ppl r gonna need a bigger allowance next tax season 
it's like they're puttin all their eggs in 1 basket, know? They gotta take on more credit 2 pay 4 the basics, and now they're strugglin to afford christmas 
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need some solid sources on this one before i start jumping to conclusions 
this data on credit card borrowing is pretty worrying - all these people taking on debt just to cope with Christmas expenses? 
. It's like, I get it, Christmas is expensive and all, but £1 billion? That's a lot of debt 
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. And now banks are getting flooded with deposits, hinting at tax rises? This just makes me think people are playing a game of financial catch-up. When will we see some actual help for those struggling?
inflation is still too high & people cant afford basic things let alone festive treats 
. It's like they're putting their financial stability on hold until the festive season is over. And with 14 million people unable to afford Christmas, it's like the system is just perpetuating more debt 
. The fact that people are borrowing more just to cope with everyday expenses is a major red flag – it's not sustainable, guys!
People are getting desperate, resorting to credit cards as a way out 
. It's like they're putting all their eggs in one basket – credit. What happens when the holiday season is over and those cards start racking up interest? 
. Anyway, maybe people are just getting creative with their credit card spending... like buying gifts for themselves after taxes go up 