Credit card debt shows record growth

Credit card borrowing rose at its fastest pace for nearly two years during February as consumers took advantage of low interest rate offers, figures showed today.

The British Bankers' Association (BBA) said its members had seen debts on plastic increase by ?352m during the month, more than double January's rise of ?144m, and the biggest increase since May 2000.

But the group said a large part of the jump was caused by consumers transferring their debt to companies offering competitive introductory offers with very low interest charges.

BBA chief executive Ian Mullen said: "The rise in credit card borrowing reflects the growing sophistication of consumers taking advantage of offers to move balances to cards charging lower interest rates."

During February borrowing through personal loans and overdrafts also increased, growing by ?867m, compared to February's rise of ?775m.

But the BBA said mortgage lending rose at a slightly slower pace during February, with net lending, which takes into account redemptions and repayments, growing by ?3.93bn, compared with January's record monthly rise of ?4.04bn.

A slight weakening in mortgage lending was also reported by the Council of Mortgage Lenders (CML), which published figures on lending by both banks and building societies today.

The group said total advances rose by ?13bn during February, compared with an increase of ?13.4bn the previous month.