The cost of using credit cards in the United Kingdom rose to its highest point since the global economic slowdown over four and a half years ago. Borrowing on bank loans, credit cards and overdrafts combined increased to £1.2 billion ($1.9 billion) in September, the highest monthly increase since 2008. Experts suggest that some of the increase is due to British families spending excessively during the summer holidays and on the Olympics.
While families are feeling the financial squeeze, economists point to more promising economic signs.
From Yahoo Finance:
According to Howard Archer, chief European and UK economist at HIS Global Insight, the extra spending might suggest growing consumer confidence. “While not too much should be read into one month’s data, September’s marked rise in unsecured consumer credit may well be a sign that consumers are becoming more confident in spending.”
The £1.2 billion increase is a substantial shift from average spending, which since 1993 has increased on a monthly average of £873 million ($1.4 billion). As the United Kingdom emerges from its double dip recession, the increased credit card spending is a promising sign for the payments industry. If household credit card spending continues to increase in coming months, sustainable economic growth might be on the horizon as the UK hopes to avoid similar financial conditions in other European countries like Greece and Spain.
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