Consumers pay off credit card debt

Consumers are starting to pay off credit card debt for the first time since May 1994, according to the British Bankers Association.

Card holders paid £40m more off their credit cards than they spent, while the rise in new card debt has slowed over the last six months. The six monthly average for new credit card debt has fallen from £0.5bn last August to £0.2bn in April, the BBA said.

The figures come at a time of falling retail sales in the high street and signs of more cautious spending as households tighten their belts following five interest rate rises since November 2003.

But while credit card debt has fallen, personal loan and mortgage borrowing has risen. Personal loan and overdraft debt rose by £415m in April.

2005-05-23 12:23:08 © Moneyextra.com