The cost of living crisis has seen many UK consumers turning to new lines of credit to make ends meet. The UK credit cards market is now split between those prioritising rewards and paying off the full balance each month, and those seeking interest-free periods to avoid incurring high rates. Lending is set to grow further, with many households set to feel the impact of the income squeeze even as inflation declines.
- UK credit card market size: Gross credit card lending continues to reach new highs after the pandemic drop-off, with a 6.8% estimated growth in gross credit card lending in 2024.
- Credit card market share UK: Barclaycard continues to lead the way in a competitive UK credit card market.
UK Credit Cards Market Trends
Significant numbers of card rejections in the last year are a concern for the market. In response, providers and price comparison sites must raise awareness of pre-approval tools, while building trust in data sharing as a way to ensure consumers can make the best financial decisions. For those still experiencing rejections, providers must offer explanations and guidance on improving their financial situation and debt management.
There are opportunities to revamp the rewards and perks aspect of credit cards. This is still often aimed at the premium end of the market and focused on travel experiences. Providers have an opportunity to engage a wider audience with everyday rewards on essentials and encourage spending on credit cards over debit cards. There is also scope to offer thematic cards. For example, inclusive working spaces and mobile data for remote workers, or cards focused on health and fitness perks.
Purchase the full report for a complete overview of the UK credit card market, including market dynamics and an analysis of what UK consumers want and why. Readers of this report may also be interested in Mintel’s UK Consumer Financial Resilience Market Report.
More About This Report
For the purposes of this report, Mintel has used the following definitions:
- Credit card – a plastic payment card allowing the cardholder to pay for goods and services with access to a pre-agreed credit facility. Purchases between £100 and £30,000 are covered under Section 75 of the Consumer Credit Act providing additional consumer protection. Credit cards can also be used for cash acquisition, although there is usually an additional fee for cash transfer or ATM withdrawal.
The credit facility allows the cardholder to have a revolving balance, which can be paid off over a period of time. There is typically an interest-free period of up to 56 days from the date of purchase, after which time interest will be charged on any outstanding balance. If balances are not repaid in full, the cardholder will be required to make a minimum monthly payment.
- Gross credit card lending – total sterling credit card gross lending to individuals (not seasonally adjusted)
- Net credit card lending – changes of total sterling credit card lending (including repayments) to individuals (not seasonally adjusted)
Meet The Expert Behind the Analysis
This report is written by Adrian Reynolds. Adrian has over a decade of experience working in research and insights. He joined the technology and media team in 2017, having previously worked as a TV analyst. Since January 2022, Adrian has focused on financial services and FinTech. He holds a BSc in Business Administration and a Master’s in International Business.
Credit card lending is growing rapidly despite high interest rates. High levels of card rejections will need strong pre-approval tools and guidance from providers.
Adrian Reynolds
Associate Director
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Executive Summary
- Opportunities for credit cards
- Boost trust in data sharing to limit card rejections and credit rating decline
- Offer more tailored perks to suit the modern world
- Embrace BNPL products to offer customers more flexibility
- Market dynamics and outlook
- Market size & forecast
- Market predictions
- Gross credit card lending will continue to expand over the next five years
- Barclaycard continues to lead the credit card market and could grow further
- Graph 1: top 10 credit card providers, 2024
- What consumers want and why
- Credit cards remain one of the most commonly owned financial products
- Graph 2: credit card ownership, by age, 2024
- The focus on rewards is reflected by most cardholders repaying the full balance each month
- Graph 3: monthly credit card payment activity, 2024
- Reward schemes lead the way when it comes to choosing credit cards
- Graph 4: reasons for choosing last credit card, 2024
- Over a quarter plan a balance transfer in the year ahead
- Graph 5: credit card activity, 2024
- Confidence in credit cards differs by financial situation
- Graph 6: attitudes of credit card holders, 2024
- Innovation and marketing
- Supermarket brands divesting while Amazon is set to make a return
- Credit card advertising spend remains subdued in difficult economic environment
- Graph 7: total above-the line, online display and direct mail advertising expenditure on credit cards, 2019/20-2023/24
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Market Dynamics
- Market size
- Gross credit card lending continues to reach new highs after the pandemic drop-off
- Graph 8: gross credit card lending (not seasonally adjusted) 2019-24
- Consumers are still feeling the impact of the income squeeze and turning to credit cards
- The majority of credit card transactions are now contactless
- Net credit card lending will grow further in 2024, driving growth in outstanding balances
- Graph 9: net credit card lending (not seasonally adjusted) 2019-24
- Graph 10: monthly amounts outstanding of net credit card lending, 2015-24
- Consumers are taking on more credit with many still feeling the income squeeze
- Graph 11: gross consumer credit lending (excluding student loans), 2018-24
- Market forecast
- Growth in gross credit card lending set to continue over the next five years
- Gross credit card lending set to reach new highs as households navigate rising costs
- Learnings from the last income squeeze
- Graph 12: gross credit card lending, 2007-12
- Market share
- Barclaycard continues to lead the way in a competitive market
- Graph 13: top 10 credit card providers, 2024
- Barclaycard is some way ahead of other banks in the multiple card market
- Graph 14: top 10 credit card providers amongst multiple card holders, 2024*
- Graph 15: top 10 credit card providers among single cardholders, 2024
- Acquisition of Tesco Bank will further strengthen Barclaycard’s position
- Barclaycard has wide appeal while Amex is attracting younger cardholders
- Macro-economic factors
- The UK moves out of recession and inflation falls to target levels
- Graph 16: GDP, 2021-24
- Graph 17: CPI inflation, 2021-24
- The elevated base rate has driven up credit card rates
- Graph 18: consumer credit rates in the UK, 2017-24
- Consumer sentiment remains fragile
- Graph 19: financial confidence index, 2020-24
- Graph 20: financial wellbeing index, 2020-24
- Falling financial confidence could limit repayments
- Graph 21: reduction of non-mortgage debts, 2020-24
- Regulatory factors
- Reforms still expected to Consumer Credit Act despite change of government
- FCA’s Consumer Duty has implications for credit markets
- The Consumer Duty focuses on four key outcomes
- There is scope for the Consumer Duty to improve credit card outcomes
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What Consumers Want and Why
- Credit card ownership
- Personal credit card ownership has remained fairly steady in recent years
- The majority of UK adults own a personal credit card
- Graph 22: credit card ownership, by age, 2024
- Ownership continues to skew towards older demographics
- Engage struggling consumers with pre-approval tools and rewards on essential daily spending
- Graph 23: personal credit card ownership, by financial situation, 2024
- The majority own a single card to boost rewards points, or avoid accumulating unmanageable debts
- Graph 24: number of credit cards owned, 2024
- Monthly payment activity
- High interest rates leaves the majority committed to repaying the full balance each month…
- …particularly among those in strong financial situations
- Graph 25: monthly credit card payment activity, by financial situation, 2024
- Younger borrowers and renters are least likely to pay off the full monthly balance
- Rising net lending and outstanding balances is seeing monthly payments rise for many cardholders
- Graph 26: change in average monthly repayment amounts in the last 12 months, 2024
- Reasons for choosing last credit card
- Reward schemes and interest-free periods lead the way in card motivations
- Demand for balance transfers to interest-free cards will have heightened switching
- Graph 27: timing of taking out last credit card, 2024
- Consumers have wide-ranging reasons for taking out cards, with rewards leading the way
- Graph 28: reasons for choosing last credit card, 2024
- Revamp rewards cards for the modern worker
- Help new customers manage their debts and ensure they have the right card
- Graph 29: reasons for taking out last credit card, by when cardholders took out their last card, 2024
- Credit card rejections
- Strong demand for credit and interest-free periods has seen a significant proportion rejected for new cards
- High level of rejections highlights room for improvement in pre-approvals
- Graph 30: credit card rejections in the last year, by age, 2024
- Rejections are highest among existing cardholders seeking new credit cards
- Credit card plans for the year ahead
- Strong demand for new cards and balance transfers will continue in the year ahead
- Younger demographics will drive applications for new cards in the coming year
- Graph 31: plans to apply for a credit card in the next year, by age, 2024
- Half of under-35s plan balance transfers in the next 12 months
- The income squeeze could bring opportunity for new brands to attract customers
- Graph 32: interest in new providers offering lower interest rates, by age, 2024
- Attitudes of credit card holders
- People struggling financially are less certain they have the right card
- Support struggling customers to ensure they have the right credit card
- Graph 33: “I am confident I have the right credit card for my needs”, by financial situation, 2024
- Close the rewards gap with more everyday benefits for customers feeling the income squeeze
- Exceed current account cashback rewards to drive daily spending in-store
- Promote Open Banking to younger consumers for seamless card management
- Graph 34: “I would prefer to manage my credit card using the same app/website as my main current account”, by age, 2024
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Innovation And Marketing Trends
- Competitive strategies and launch activity
- Supermarket brands divesting from the credit card market
- Barclaycard cuts minimum repayments
- Amazon partners with Barclays to re-enter the credit card market
- Payment Systems Regulator cites insufficient competition to Mastercard and Visa
- Amex enhances joining offers while looking to boost payment partnerships
- Amex launches buy now, pay later product
- Santander adds Edge credit card to its range
- Yonder introduces free tier to expand its curated rewards card
- Curve launches first UK credit card and adds buy now, pay later product
- Pesto looks to secured lending market with asset-backed Mastercard in the US
- Advertising and marketing activity
- Advertising expenditure remains subdued in difficult economic environment
- Graph 35: total above-the line, online display and direct mail advertising expenditure on credit cards, 2019/20-2023/24
- Amex overtakes Barclaycard with significant advertising investment in the last year
- Barclaycard focuses on interest-free period for latest Platinum card TV campaign
- American Express TV campaign highlights perks and support
- Ocean Finance pushes its own credit card in campaign focused on pre-approval
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Appendix
- Report scope and definitions
- Market definitions
- Abbreviations and terms
- Market forecast data and methodology
- Market forecast and prediction intervals (value)
- Forecast methodology
- Methodology
- Consumer research methodology
- Nielsen Ad Intel coverage
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