GROWTH IN THE UK

In 1990, total credit card debt
outstanding was almost £9bn and by
1996 this had grown to about
£16bn. In 1990 there were some 80
card issuers and by 1996, this had
grown to more than 800, a ten-fold
increase. This growth partly reflects
the overall growth in consumer
credit in recent years — in
December 1992 annual growth of
consumer credit was 1 per cent and
by June 1997 was more than 18 per
cent. However, Chart 3 shows that
since 1990 the growth in credit
cards has generally been faster than
that of other forms of consumer
credit. At present, credit cards
account for about 21 per cent of net
lending of consumer credit in the
UK (up from 19 per cent in 1991).
The strong growth in the UK
credit card market is all the more
significant because a number of
commentators had believed the
market had reached maturity five or
10 years ago — this belief was
influenced by the fact that the
payment card market in the UK is
one of the most developed in
Europe. However, a comparison
with the US credit card market
shows that the UK has some way to
go to reach the maturity of the US
market. In 1994 there were twice as
many cards per head in the US
as in the UK and borrowing on
credit cards accounts for a larger
proportion of unsecured consumer
borrowing in the US than in the UK