Credit card debt figures show consolidation trend continuing

Consumers are continuing to consolidate credit card debt, according to new figures from the British Bankers' Association (BBA).

Its data for July has revealed the total amount spent on cards was £7 billion, whereas £7.1 billion was paid back.

This was similar to June when the repayment figure was the same, but £6.9 billion was spent.

And the trend for consumers to borrow less was also indicated by the dip in borrowing on loans and overdrafts, with the June increase in overdrafts of £0.2 billion being followed by a £0.3 billion decline in July.

The trend of lower borrowing may indicate consumers are keen to get debt free or at least bring what they owe under control, with unsecured credit shrinking by 1.1 per cent in the past year.

And the growth in mortgage lending has also been lower, with an increase of only £0.9 billion in July, the tally of £7.6 billion being down by eight per cent on a year earlier.

BBA director of statistics David Dooks said: "Demand for borrowing from both households and companies continues to be weak, reflecting the slow growth in the economy."

Concern about personal debt may also be a key factor in shaping recent credit trends.

A survey published earlier this month from insolvency professionals' body R3 revealed 47 per cent of consumers were concerned about their debt levels in July, up seven per cent on the same month in 2010.

R3 president Frances Coulson warned that those with the biggest debt problems could include public sector workers whose jobs are under threat from austerity measures.

By James Francis