NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

How much credit card debt does the average Brit really have?

How much credit card debt does the average Brit really have?
Image source: Getty Images


Credit card debt in the UK has been steadily climbing since July 2013, with Britain as a whole owing £72.5bn on credit cards according to statistics released by the Bank of England. A combination of austerity and wage stagnation over the past ten years means that the amount of borrowing on credit cards has continued to climb, reaching an annual growth rate of 7.9% in November 2018.

Looking for a new credit card?

Great credit card offers are out there — you just need to know where to look! If you’re after some of the top offers on the market, a great place to start is our list of the top credit cards.

How much credit card debt does the average person in the UK really have?

The stats show that each UK household has an average of £2,688 unpaid on credit cards, with the Money Advice Service saying that 8.3m of us are over-indebted. Meanwhile, interest rates have continued to climb over recent years, despite the Bank of England base rate remaining at historically low levels. The average APR stood at 18.5% in October 2018, compared with 15% in 2006.

To put this into perspective, if you owed the average balance of £2,688 and had a credit card with an APR of 18.5%, if you paid £100 off your balance each month, you would not clear your debt until December 2021 and you would incur interest charges amounting to £725. In the same scenario but played out with an APR of 15%, the debt would be cleared two months earlier and the interest costs would be £559. Not only are Britons borrowing more, but they are doing so at a higher cost, resulting in credit card debt piling up.

How can a balance transfer card help?

One of the ways to tackle credit card debt is to find a balance transfer deal. These are credit cards that allow you to transfer an existing balance from another card or several other cards, to consolidate your debt. Balance transfer cards typically offer a set introductory period over which you are charged no interest on your balance.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

If you take the example above of a balance of £2,688 and repayments of £100 per month, if you secured a balance transfer card with an introductory 0% period of 30 months, the balance of £2,688 could be paid off by April 2021 with no interest charges incurred. However, most balance transfer cards with a long introductory period charge a balance transfer fee. If the fee were 3%, you would be required to pay £80.64 to transfer your balance. There are fee-free options out there, but they usually have shorter 0% introductory periods.

Will the average credit card debt continue to increase?

Based on the trend of the past ten years, the likelihood is yes – credit card debt is likely to continue to increase. With the economic uncertainty surrounding Brexit, it is unlikely that the key factors for increased debt (austerity and wage stagnation) will change any time soon. The Bank of England is also expected to raise the base rate further this year, something which could then be passed on to consumers in the form of increased interest rates.

Some borrowers, however, are being savvy. According to UK Finance, for just under 45% of credit card balances no interest is paid, as borrowers are either clearing their balance in full each month or have secured a 0% deal – something to think about if you are one of the 8.3m Britons currently over-indebted.

Applying for a credit card? Here’s what you need to know.

Preparation is key when applying for credit, but it’s not just about finding the right card for you. Did you know that there are several things you can do before you apply, to increase your chances of getting accepted for a credit card?

To help you on your path to a successful application, we’ve created this free report, “5 Things To Know Before You Apply For A Credit Card”.

Just enter your email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.


Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.