UK Consumer Debt Explained: Credit Cards, BNPL, Car Finance and Overdrafts in 2026

 

UK consumer debt is often discussed as if it were one number. It is not. Credit cards, overdrafts, buy now, pay later (BNPL), car finance, hire purchase and student loans are measured in different ways by different institutions. The result is a surprising amount of confusion—especially when activity, product use and balances outstanding are mixed together.

Here is the clearest current picture. At 31 July 2026, the Bank of England recorded £257.529 billion of consumer credit outstanding, excluding the Student Loans Company. Of that, £82.250 billion was credit-card borrowing and £175.279 billion was reported as “other consumer credit”.

The headline: cards are about a third of the measured consumer-credit stock

On the Bank of England’s like-for-like measure, credit cards represent 31.9% of measured consumer credit excluding student loans. The remaining 68.1% sits within the broader “other consumer credit” category.

That distinction matters. “Other consumer credit” is not another name for personal loans, car finance, hire purchase or BNPL. It is a broad residual category. The Bank describes other forms of consumer credit as including products such as car-dealership finance and personal loans, but the published balance does not provide a clean pound-for-pound allocation across all those products.

Bottom line: the £175.279 billion “other” total should not be relabelled as car finance, hire purchase, BNPL or personal loans. Doing so would overstate what the data can prove.

Where BNPL, overdrafts and hire purchase fit in

These products are important, but the best current public evidence is often about how many people use them or how much new lending is being written, rather than a comparable national balance outstanding.

• Credit cards: 65% of UK adults (35.3 million people) held a card in the Financial Conduct Authority’s Financial Lives 2024 survey. The FCA also estimated that 5% of adults—2.8 million people—were in persistent credit-card debt, meaning they had paid more in interest, fees and charges than principal over the previous 12–18 months.
• Overdrafts: 21% of adults reported holding or using an overdraft. Separately, Bank of England data show £6.936 billion of household sterling overdrafts on monetary-financial-institution balance sheets at 31 July 2026. This is a different coverage basis from the main consumer-credit total, so it should not be added to the headline figure.
• BNPL / deferred payment credit: 20% of adults (10.9 million) reported using unregulated deferred payment credit in the previous 12 months. Eleven per cent had at least £50 outstanding and 2% had at least £500 outstanding. These are survey thresholds, not a national market-balance estimate.
• Retail credit and hire purchase: 12% held retail instalment credit, 12% a store card, 11% a catalogue or shopping account, and 4% retail hire purchase excluding rent-to-own. Again, these are product-holding estimates and can overlap.

Car finance is a large flow—but it is not the same thing as debt outstanding

Motor finance is especially easy to misread. The Finance & Leasing Association reported £3.870 billion of point-of-sale consumer-car-finance advances in June 2026, covering 187,304 cars. That is new business in one month, not the stock of UK car-finance debt outstanding.

Likewise, the Bank of England reported £2.006 billion of net consumer-credit borrowing in July 2026—£0.864 billion on cards and £1.142 billion through other consumer credit. Net borrowing describes the monthly change after repayments; it should not be mistaken for the amount households already owe.

Student loans need their own line

Student loans are also material but are best treated as a separate system. The Student Loans Company administered a £324.8 billion UK portfolio at face value at 31 March 2026. It should not simply be added to the Bank of England’s July consumer-credit total: the two series have different dates, accounting bases and coverage.

What the data tell us—and what they do not

The reliable conclusion is not that one product dominates every form of household debt. It is that the Bank of England’s core consumer-credit series gives a robust view of credit cards versus a broad non-card residual. Beyond that, the evidence becomes product-specific: the FCA shows reach and repayment pressure; the FLA shows motor-finance activity; the Student Loans Company shows its administered portfolio.

That is why a single “all UK non-mortgage debt” headline can be misleading. A good reading of the data keeps three questions separate:

1. How much is outstanding? A debt stock at a point in time.
2. How much new borrowing is taking place? A monthly or annual flow.
3. How widely is a product used? A consumer survey measure.

For readers watching household finances, the key takeaway is straightforward: credit cards remain the only large consumer-credit component separately quantified in the latest coherent Bank of England stock. BNPL, car finance, overdrafts and hire purchase matter to households, but their publicly available numbers must be read on their own terms—not added together as if they were slices of the same pie.

Primary sources

• Bank of England Bankstats A5.6 / IADB — consumer-credit amounts outstanding, July 2026.
• Bank of England Money and Credit — July 2026.
• Financial Conduct Authority, Financial Lives 2024: Credit & loans.
• FCA Financial Lives 2024, Annex A: Product holdings.
• Finance & Leasing Association — consumer car finance, June 2026.
• Student Loans Company Annual Report and Accounts 2025–26.

Figures are sourced from the publications above. This article is for information only and is not personal financial advice.