UK Credit Card Surges and Strategic Debt Recovery Management

UK credit card borrowing rises at fastest annual rate in almost 2 years

Welcome to Debt Matters, the podcast where we turn UK headlines into practical takeaways for credit, collections, and recoveries teams. Today we are looking at fresh Bank of England data showing a sharp jump in consumer borrowing, with credit cards leading the way. We will break down what happened, why it matters for arrears risk, and what to change in your strategy before the post-Christmas squeeze hits.

What happened

* Net consumer credit borrowing rose to £2.1bn in November 2025, up from £1.7bn in October.

* Net borrowing on credit cards was £1.0bn in November, up from £0.7bn in October.

* Annual growth in credit card borrowing increased to 12.1% from 10.9%, the highest since January 2024.

* Overall annual growth in consumer credit rose to 8.1% in November from 7.5% in October.

* Households also added £8.1bn of deposits in November, signalling caution alongside borrowing.

Why this matters for debt collection

1. Early-stage volumes may rise in Q1 2026

More revolving credit use typically means more accounts drifting into 1 to 2 missed payments after seasonal spending. This is where your comms, segmentation, and self-serve options either prevent roll-forward or accelerate it.

2. Affordability stress is becoming less “optional”

A higher reliance on credit cards can reflect households smoothing essentials, not just discretionary spend. Collections approaches built around “pay in full” assumptions are more likely to fail, increasing re-default and complaints risk.

3. The “borrowing and saving at the same time” signal

With deposits also rising, some customers are stockpiling cash while carrying expensive revolving balances. That can mean uneven financial resilience: some will be fine, others will be juggling multiple commitments. Your models should look beyond income and consider volatility and utilisation.

4. Higher rates keep revolving debt painful

The Bank of England data shows credit card effective rates remain high (around the low 20% range), so balances can spiral faster when only minimums are paid.

That raises the importance of earlier engagement and realistic repayment plans.

Practical actions for creditors and collections teams

* Tighten pre-arrears triggers: utilisation spikes, multiple card use, payment reversals, and sudden overlimit behaviour.

* Improve “first 7 days” journeys: frictionless contact, clear options, and a simple route to set up a plan before a second missed payment.

* Refresh segmentation: treat “seasonal spend” differently from “structural shortfall” (repeat borrowers, persistent balances, frequent short-term fixes).

* Expand plan design: smaller first payments, aligned pay dates, and step-up plans that reduce immediate drop-off.

* Make vulnerability support obvious: signpost help early, not only after escalation, and train agents to spot distress language quickly.

* Audit your letters and scripts for tone: rising borrowing in the system means more customers will be embarrassed or anxious. A supportive tone improves engagement and cure rates.

* Review complaint hot-spots: fees, interest explanations, and perceived pressure. If volumes rise, weak points show up fast.

Credit card borrowing accelerating to 12.1% annual growth is not just a macro headline. It is a near-term operational signal for anyone managing arrears: expect more customers needing earlier, simpler, and more sustainable repayment routes.

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