Britons take scissors to their credit-card habits

Almost two million Britons have cut up their credit cards in the past year to avoid overspending. Analysis of the £52bn UK credit-card market suggests that 6 per cent of users – or 1.8 million – have taken scissors to their plastic to avoid sinking into financial trouble during the recession.

More consumers have left their cards intact but have stopped using them. A uSwitch poll of 1,000 consumers found an estimated 10 million credit-card holders are only keeping their cards in case of emergency.

Seven per cent of Britons are estimated to have between five and six unused credit cards which have a combined credit limit of £200bn, far in excess of the £42bn of credit-card debt that was outstanding in March.

During the economic boom, the amount splashed on plastic in Britain rose from £47bn in 2002 to a peak of £57bn in 2005. But since then, borrowers are paying more off their monthly balances each month.

The country's outstanding balance fell to £52.6bn in March.