UK Households Tap the Plastic As Credit Card Borrowing Hits Alarming Levels

6th January 2026

The cost of living squeeze in the UK is showing up where it hurts most - in credit card bills. Recent figures reveal that UK households are borrowing on their cards at the fastest annual rate in nearly two years, raising concerns that many families are relying on debt just to make ends meet.

According to Bank of England data, credit card borrowing jumped sharply in late 2025, with net borrowing reaching £1 billion in November alone — up from £700 million the previous month. Annual growth has hit 12 %, the strongest pace since early 2024. Overall consumer credit, including loans and card debt, surged by £2.08 billion in November, reflecting both seasonal spending and broader financial pressures.

The numbers signal more than just post-Christmas shopping spikes. Analysts warn that some households are increasingly using credit to cover essentials, not just luxuries. Rising food prices, energy bills, rent, and other day-to-day costs are squeezing family budgets, and credit cards — with their high interest rates — are often the only short-term solution.

Economists say the trend is worrying but not yet a full-blown crisis. Many households continue to save alongside borrowing — in November 2025, UK savers deposited £8.1 billion into bank accounts — suggesting cautious financial behaviour remains. However, if incomes fail to keep pace with costs, the growing reliance on credit could increase financial stress and default risk in 2026.

The UK's credit card surge is a warning flag for households and policymakers alike.

While borrowing helps families bridge short-term gaps, the rise underscores the fragility of household finances in the face of ongoing living cost pressures.

Without stronger wage growth or targeted support, millions of Britons could be left juggling debt just to stay afloat — and that's a challenge the economy cannot ignore.

At the end of July 2025, total outstanding credit card debt in the UK was approximately £75.5 billion but the total will now be very much higher following the last two month of 2025.

This figure represented an increase over the past year, rising about 6.2 % (£4.4 billion) compared with July 2024.

On average this worked out at around £2,612 per household and £1,349 per adult in credit card balances.