According to the latest figures from the British Bankers’ Association (BBA), unsecured lending in July rose by £0.3 billion, comparable to the six-month average, yet credit card borrowing fell in the same period.

Borrowing through loans and overdrafts rose by double the monthly average (£0.6 billion) while credit card lending fell by half this amount, resulting in on-target average monthly figures for overall unsecured borrowing.

The figures show a continuation of the marked shift away from spending on plastic as rates begin to rise in this sector of the lending market, prompting consumers to review their borrowing habits.

“Unsecured lending remained subdued in July, with borrowing on credit cards again reducing,” said David Dooks, the director of statistics for the BBA.

“Weaker deposit growth could also partly reflect the management of short-term personal finances becoming more focussed, with more borrowing requirements being planned on a longer term basis.”

Mr Dooks also noted that mortgage lending remained “robust” as monthly lending figures showed the market’s recent rises were comparable with the peak statistics seen in 2003 and 2004.

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