Credit card borrowing grows at fastest annual rate in nearly two years
The rise in consumer credit borrowing may be a reflection of everyday costs becoming harder to manage without turning to credit, a charity said.
Credit card borrowing grew at the fastest annual rate in nearly two years in the run-up to Christmas, fuelling concerns that everyday costs are becoming harder for some households to manage without turning to borrowing.
A Bank of England report showed that the annual growth rate for consumer credit edged up to 8.1% in November, from 7.5% in the previous month.
Within this, the annual growth rate for credit card borrowing increased to 12.1% from 10.9% – the highest figure since January 2024 when it was 12.5%.
Simon Trevethick, head of communications at StepChange Debt Charity, said: “For many households, the increase in consumer credit borrowing in November may reflect the reality that everyday costs are becoming harder to manage without turning to credit. The increase could also indicate people borrowing more in preparation for the festive period – our own polling found that 14 million people would struggle to afford Christmas.
“While some people will be able to repay any additional borrowing, others risk carrying balances into the new year and beyond. No one should feel they have to cope with problem debt on their own. Free, impartial debt advice is available.”
The Bank’s Money and Credit report for November also indicated that households were shoring up their savings.
In the same month as the autumn budget, households deposited an additional £8.1 billion with banks and building societies in November, up from £6.7 billion in October. The latest figure included £5.1 billion of cash going into Isas.
Following months of speculation about the cash Isa limit, the Government announced in the budget that the annual adult cash Isa subscription limit will be reduced to £12,000 from April 2027.
The annual overall contribution limit into adult Isas will remain at £20,000, potentially encouraging some savers who reach the £12,000 cash Isa limit to put more money in stocks and shares. Over-65s will retain the full £20,000 annual cash Isa allowance.
Looking at mortgage borrowing, the number of mortgages approved for house purchase fell to 64,500 in November, which was around 500 lower than in October.
By contrast, approvals for remortgaging, which only capture remortgaging with a different lender, rose by 3,200 to 36,600 in November.
Jason Tebb, president of OnTheMarket, said: “Approvals decreased only slightly in November, underlining the overall resilience and determination from buyers and sellers alike to proceed with their moves.”
Simon Gammon, managing partner, Knight Frank Finance, said: “Given all the noise in the run-up to the budget, it looks like many buyers put plans on hold until after Christmas.
“That said, mortgage rates continued to ease through December, and anecdotal evidence from our brokers suggests that some pent-up demand should be released as we move towards spring. The lenders begin the year with fresh targets and we expect the larger lenders to be most aggressive in cutting rates in the first weeks of January.”
Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “Throughout 2025, it has been encouraging to see lenders offering increasingly competitive mortgage products, particularly any aimed at first-time buyers, helping to support activity despite wider economic uncertainty.
“The (Bank of England) base rate cut introduced before Christmas is likely to further boost confidence as we head into 2026, making borrowing more affordable and encouraging more buyers to take the next step.”
The report also said that in November, UK non-financial businesses borrowed, on net, £6.3 billion of loans from banks and building societies, including overdrafts, following net repayments of £1.2 billion in October.
