UK credit card spending spree continues

Millions of British debtors have admitted they are unable to pay off their credit card bills after spending a record £11.96bn in one monthly spending spree.

Throughout June of this year, soaring numbers of people turned to their credit card to fuel a total national debt of £55bn, solely on plastic.

Over the last three months, 44 per cent of card holders cleared their plastic balance regularly while those paying in full, dropped by ten per cent.

The spenders fell across all age groups of 2,000 customers at Morgan Stanley bank, and found that most to blame for not meeting their credit obligations were young people in their mid-twenties.

Analysts said those in their twenties often indulged in the dream of first-time buying, using credit cards to pay for luxurious furnishings and expensive additions to invest in their property.

Some moving up the property ladder said they felt more at ease to spend with one of the 67m credit cards circulating, as their home was now worth more than its original value.

Patrick Muir, marketing director for Morgan Stanley, said:
"Some people cannot afford to pay off their debt. Others put a higher priority on other aspects of their life."

"People use their card because they are comfortable living with the debts – even though they are high."

Figures show that 35 million people in the UK own at least one credit card – charging the £1trillion sum, now owed on cards, mortgages and loans.

Commenting on the nation's credit miseries, Vince Cable MP, said: "The figures show that banks have been recklessly fueling the borrowing boom and now interest rates are on the increase, we are seeing more people unable to pay their credit card bills in full."

 

11th August 2004

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