New data released by UK Finance reveals that outstanding balances on credit cards contracted by 12.6 per cent in the year to May, as cardholders used the lockdown to pay down bills.
May also saw credit card spending by cardholders recover against the previous month, with the total value of credit card transactions rising to £9.6 billion from £8.7 billion in April.
However, the data shows that the value of spending on credit cards was 44.7 per cent less than in the same month a year earlier. Overall, the continued uncertainty caused by Covid-19 saw transactions down 39 per cent on May last year.
Contactless card usage also rose sharply in April as UK consumers and retailers sought to utilise the increased contactless limit. However, this was still down 39.1 per cent from April 2019, as restaurants, bars and pubs remained closed and public transport was limited to essential travel only.
As the economy begins to open up, UK Finance says it anticipates spending levels to increase and the industry will continue to support customers during this uncertain time.