By Ian Barnsley
UK consumers are using their credit cards to borrow more money than in any of the past five years, according to a new study.
The British Bankers' Association (BBA) reports borrowing grew 4.7 per cent in 2013 and has not been higher since 2009.
As much as 40 per cent of the current total is not generating any interest because of lengthy interest-free offers.
More than 2 billion purchases made with credit cards
Around 2.3 billion purchases worth £139.5 billion were made with credit cards in the whole of last year.
That is 5 per cent more transactions, involving 3 per cent more money, than in the previous 12 months.
"These figures show credit card borrowing is now growing more strongly than at any time in the last five years," BBA statistics director David Dooks said.
"Greater housing activity and impressive jobs numbers are starting to feed consumer confidence, with customers more optimistic about their ability to pay back money they borrow.
"This all provides further evidence of the economic recovery."
Consumer credit expected to swell to £164 billion
Meanwhile a separate report predicts consumer credit is expected to swell to £164 billion this year as the demand for credit card borrowing and retail finance grows.
The EY Item Club forecast for financial services predicts it will increase by 3.1 per cent, after a rise of just 0.8 per cent in 2013.
It said consumers are now a better bet for banks to lend to after four years of falling credit availability.
Household debt-to-income ratios have fallen and write-offs on consumer lending are forecast to drop.
The report said: "The pace of growth should increase as households become more confident about their employment and financial situation."