Moneyextra.com is seeing credit card debts being paid back as consumers work to sort out their finances. Indeed, average outstanding card balances have been falling for 10 months and are now below £3,000 for the first time in 19 months.


At £2,521, the average outstanding balance transfer in February was the lowest since AWD Moneyextra's records on transfers began in December 2003.
According to the Bank of England's latest numbers, overall credit card lending increased by £0.7 billion in January compared with a revised £0.2 billion increase in December.



Moneyextra.com's Robin Amlôt comments,

It's clear that what we're seeing is a two-tier credit card market. Card deals are less attractive than they were this time last year. Many people are finding their zero per cent borrowing deals coming to an end and they're opting to pay off debt.

In fact, outstanding card balances have been falling since in April 2005 and are down by more than a thousand pounds (£1,006 or 28.5%) from a peak of £3,527 in that month. February 2006 marks the first month that average outstanding credit card balances have been below the £3,000 level since August 2004.


Source: Money Extra