UK credit card statistics
How are Brits using their credit cards?
If used correctly, credit cards can help you to spread out expenses month by month, earn rewards on day-to-day spending and improve your credit score. However, some people are reluctant to use their cards for fear of getting into debt.
We’ve collated the latest statistics on credit card lending, ownership, repayment and spending in the UK. Here’s what we found.
- As of January 2021, there were 62.8 million credit cards issued to UK residents.
- There were 196 million credit card transactions in January 2021. This is 31% less than there were in January 2020.
- On average across 2020, 40% of all credit card transactions were conducted via contactless payment.
- The total outstanding balance incurring interest from all credit card accounts decreased by 19% in January 2021 compared to January 2020.
- The average value of purchases made using a credit card decreased by 35% (£82 less per purchase) in January 2021 compared to January 2020.
- The average interest rate for credit cards in 2020 was 18.1%.
Number of credit card accounts
In January 2021, there were 62.8 million credit cards issued to UK residents. Given the 92.2 million debit cards issued to UK residents at the time, people are 47% more likely to own a debit card than a credit card.
There has been a 3% decrease (-1.9 million) in the number of credit card accounts open between January 2020 and January 2021.
|January 2021||January 2020|
|Credit cards||62.8 million||64.7 million|
|Debit cards||92.2 million||97.3 million|
|Total||155 million||162 million|
Number of credit card transactions
By January 2021, credit card transaction volumes had dropped by 31% (-88 million) since January 2020. Credit card transaction volumes dipped to their lowest point at the end of April 2020. This could be explained by the national lockdown introduced on 16 March 2020.
Contactless credit card transactions are undoubtedly popular. On average across 2020, contactless credit card transactions accounted for 40% of all credit card transactions.
|Volume of credit card transactions||Contactless credit card transaction|
|Jan-20||284 million||128 million|
|Feb-20||275 million||126 million|
|Mar-20||273 million||108 million|
|Apr-20||163 million||32 million|
|May-20||186 million||60 million|
|Jun-20||227 million||76 million|
|Jul-20||261 million||106 million|
|Aug-20||273 million||123 million|
|Sep-20||281 million||125 million|
|Oct-20||273 million||122 million|
|Nov-20||273 million||95 million|
|Dec-20||291 million||114 million|
|Jan-21||196 million||71 million|
Credit card lending and repayments, monthly 1993-2021
Gross lending statistics were collected monthly from April 1993 to February 2021 and repayment statistics from January 2010 to February 2021. Throughout the latter period, the two statistics follow similar trajectories, with repayments always lower than lending, as expected.
The trend shows that lending to credit card users consistently increased from January 2010 to December 2019, after which gross lending dropped by over half (53%) over the next four months. In December 2019, the City regulator’s new affordability rules forced banks to identify customers who had been in persistent debt and suspend their credit cards in February 2020 if they could not respond. This likely explains the graph’s drop in gross lending and repayments.
Credit card issuers (and lenders generally) are facing increasing pressure from regulators to curb certain practices that used to provide healthy revenue streams.”
Credit card usage over the past year
Volume and average value of credit card transactions
The average value of transactions stayed fairly level over the year. During this time, the average value of each credit card transaction was £53.49.
The volume of transactions dropped in April 2020. Similar to the decline in gross lending on credit cards, this drop in transactions is likely due to the City regulator’s new affordability rules, which suspended some people’s use of their credit cards from December 2019. Between February 2020 and April 2020, the volume of transactions dropped from 275 million per month to 163 million per month (a 41% decline).
|Average value per transaction||Volume of transactions|
Average outstanding credit card balance
Your outstanding balance is the money you’ve borrowed but are yet to repay. Between January 2020 and January 2021, both the average outstanding credit card balance and the number of accounts with outstanding balances decreased gradually.
At their individual peaks in this time period, the average outstanding credit card balance was £1,829 (January 2020) and there were 38.7 million accounts with outstanding balances (February 2020).
|Accounts with balances outstanding at the end of the calendar month||Average outstanding credit card balance|
Outstanding balances incurring interest
From January 2020 to January 2021, the total outstanding balance incurring interest dropped from £37.6 billion to £30.5 billion, a decrease of 19%. Meanwhile, the percentage of accounts accruing interest increased from 53.9% to 56.3%. Therefore implying that more accounts are going into debt, but the overall indebted amount has lessened.
The total outstanding balance incurring interest is classified as the balances that are not paid off by the end of the month. The average interest rate for credit cards in 2020 was 18.1%.
|Percentage bearing interest||Outstanding balances incurring interest|
Credit card rewards in the UK
Credit card companies can offer valuable rewards — cash back, free trips and discounts, among many others. These rewards can be very attractive, with 51.2% of cardholders swiping or tapping just to be rewarded. We have taken a closer look at who is most likely to use these cards, how much they spend on them and what kinds of purchases they make in order to reap the benefits of the cards.
|Spent on a credit card only for the rewards||51.24%|
|Has not spent on a credit card only for the rewards||48.76%|
Our recent study of 2,000 Brits revealed that cardholders spent an average £1,554.47 each chasing points in the past year, adding up to an estimated £23.9 billion in total. We’re most likely to spend this money on food and drinks (51.7%), but clothing and accessories (47.5%) and household items (40.5%) aren’t far behind.
|Credit card purchases for rewards programme||Percentage|
Finder's credit specialist Chris Lilly gives his insights
- To maintain growth, card issuers are forced to either trim costs elsewhere or find new ways to generate revenue. For consumers, this means that we’ve seen a shortening of promotional 0% periods over the last few years and an increase in average APRs (the annual percentage rate is a summary of the annual cost of borrowing).
- There’s also closer scrutiny during the application and approval process, so that card issuers can demonstrate that they’re only lending responsibly (not to mention, to protect their own backs from potential defaults). Thankfully, more card issuers are looking to non-standard lending as a new revenue stream, using smarter technology to identify safe ways to lend to those with bad credit, who were a once-overlooked demographic. For consumers, this means there is greater selection for those with less-than-perfect-credit scores, albeit with APRs that are still high.
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