The economic landscape over the past five years has stimulated consumer spending, fuelling growth in both debit card and credit card spending. Low interest rates have been the main driver in credit and debit card spending over the period, enabling lenders to offer attractive rates and the spending public to ‘go to town’, spending and borrowing rather than saving. In addition, a booming property market has helped consumers feel asset-rich and this, psychologically at least, facilitates the acquisition of significant non-secured debt as such wealth gives the consumer the confidence to spend further.

Arguably, raised house prices have also de-sensitised consumers to taking on large quantities of debt, and has therefore stimulated further personal borrowing. The low interest rates that stimulated such levels of debt increased from 3.5% in November 2003 to 4.75% in November 2004, then stabilised at 4.5%, where they remain in June 2006. With such economic conditions, total net lending to individuals in April 2006 stood at £1.19 trillion.