According to Datamonitor, consumers had a total credit card debt of £470 billion last year and this will reach £639 billion by 2010.
“Consumers continue to grow more comfortable using cards for both day-to-day transacting and borrowing,” said Kieran Hines, senior cards and payments analyst at Datamonitor.
“The use of credit cards continues to grow over time as they are both accepted as a means of payment and also offer access to a line of pre-approved credit.”
However, while credit card debt is up, it could rise further due to the clampdown on penalty charges, the report warned.
With banks losing money due to the cut in cost, interest rates and other charges may rise to allow lenders to recoup some of their losses at the expense of customers.