Christmas spending was up overall this year, with shoppers forking out record amounts on gifts and food, but according to research from comparison site Moneyextra.com, Brits are spending less on their credit cards than previous trends show.

January saw a 17 per cent jump in the average credit card balance from December to £2,168 as a result of Christmas spending, but this also marked a 25 per cent drop when compared to £2,901 for January 2007, and a drop of 36 per cent when compared to the same month in 2005 when the average balance on a credit card was £3,411.

According to Moneyextra.com, this research illustrates that while the credit crunch may not have dramatically affected the amount that people spent at Christmas, it may have been a factor in the fall of credit card balances as consumers try to avoid high interest debt and cope with rising food and energy prices.

“There is a clear trend of falling outstanding credit card balances over the course of the last three years,” said Robin Amlôt, of Moneyextra.com. “The question is whether this actually reflects consumers clearing debts or merely a rescheduling of them. It’s far less easy now for so-called ‘rate tarts’ to continue to hop from one credit card deal to another but what we are witnessing is a rise in other forms of borrowing, notably secured lending.

“Some consumers will be paying down their credit cards but others have been rescheduling expensive high-interest rate short-term credit card debt onto longer, structured loan products with lower interest rates. This means they will have been able to reduce their monthly outgoings but potentially at the expense of a much larger interest rate bill over the whole course of the loan repayment.”

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