UK borrowing costs: Money and Credit data

The Bank of England’s monthly Money and Credit release shows how much UK households and businesses borrowed and saved, and the average interest rates they actually paid. For anyone repaying a credit card or a personal loan, it is one of the most useful official snapshots of what borrowing costs in practice, as opposed to the headline rates in adverts. This post sets out the latest figures and turns the rate gap between cards and loans into a worked £ example. It is not advice, and LoanCalc Lab is not a lender or a broker.

The September 2026 figures

For consumer credit (borrowing that is not a mortgage), the Bank reported:

• Net consumer credit borrowing of £1.9 billion in September, down from £2.7 billion in August and slightly below the previous six-month average of £2.1 billion.
• Within that, net borrowing on credit cards was £0.7 billion, down from £1.3 billion, and on other consumer credit (such as car dealership finance and personal loans) £1.2 billion, down from £1.4 billion.
• The annual growth rate of all consumer credit edged up to 9.8%, from 9.7%. Credit card borrowing grew by 13.1% (from 13.3%) and other consumer credit by 8.3% (from 8.1%).

And for the interest rates households actually paid:

• The effective rate on interest-charging credit cards rose to 21.71%, from 21.55% in August.
• The effective rate on new personal loans fell to 9.85%, from 9.96%.
• The effective rate on interest-charging overdrafts rose by 0.52 percentage points, to 20.79%.

An “effective” rate is the actual interest paid, averaged across many borrowers and lenders. It is not a quote, and it is not the rate any one person will be offered. The card figure covers interest-charging card balances only. Your own rate depends on your credit record, the amount, the term and the lender.

“Net” borrowing means new borrowing minus repayments over the month. So a fall from £2.7 billion to £1.9 billion does not mean households owe less. It means total consumer credit grew by less in September than in August. The annual growth rate of 9.8% compares the total amount outstanding with a year earlier. Monthly figures can be revised in later releases, so we treat a single month as a snapshot rather than a trend.

Why these numbers matter

The headline message is the size of the gap. In September the average interest-charging card cost more than twice as much as the average new personal loan. That gap does not mean anyone should take out a loan, but it does explain why it is worth knowing the rate on every balance you carry, and why the order in which you pay debts down can change the total cost.

Card rates and overdraft rates are usually variable, so they can move with the provider’s pricing and with wider interest rates. Most personal loans are fixed for the whole term, so the 9.85% figure tells you about new loans, not about loans people already hold. For what a Bank Rate change would and would not do, see our November Bank Rate preview.

A worked example: £5,000 at card and loan rates

To put the average rates into pounds, here is a £5,000 balance at the two September averages, 21.71% and 9.85%. These are illustrative figures from our own calculators, assuming no fees and a payment that stays the same every month. Real card minimum payments usually fall as the balance falls, which makes repayment slower.

Same term, different rate. Repaying £5,000 over 36 months in our personal loan / EMI calculator:

• At 21.71%: £190.20 a month, total interest £1,847, total repaid £6,847.
• At 9.85%: £160.98 a month, total interest £795, total repaid £5,795.

Over three years, the higher rate costs £1,052 more in interest on the same balance, or about £29 a month.

Paying a fixed £150 a month on the card. In our consolidation break-even calculator, a £5,000 card balance at 21.71% with a steady £150 a month takes 52 months to clear, with total interest of £2,730. The same £5,000 as a 36-month loan at 9.85% with no fee costs £160.98 a month and £795 in interest, which is £1,935 less interest, but £10.98 a month more to pay.

Those numbers leave out things that can change the answer: arrangement fees, whether you would actually be offered a rate near the average, any 0% balance transfer offer and its fee, and the risk of running the card balance up again after clearing it. Our guides to personal loans versus credit cards and when consolidation breaks even cover those points. We are not suggesting anyone borrow or consolidate.

If you hold several balances, the snowball vs avalanche calculator compares paying off the smallest balance first with paying off the highest rate first. With card rates averaging over 21%, the order can make a noticeable difference to total interest. MoneyHelper’s personal loans guide is a neutral place to read about fees, credit checks and the 14-day right to withdraw.

What we will add on 30 November

• net consumer credit borrowing for October, split into cards and other credit;
• the annual growth rates for each;
• the effective rates on interest-charging cards, overdrafts and new personal loans;
• a refreshed £ example if the average rates have moved.

The October 2026 release is due on Monday 30 November 2026. We will keep this post at the same address and update it each month.

Related news

• Bank Rate decision: November 2026 preview — the decision due on 5 November.
• UK inflation October 2026: what to watch — the ONS figures due on 18 November.
• UK Budget: what it means for borrowers — what Budget 2026 changed for people with debts.

Sources

• Bank of England — Money and Credit, September 2026
• Bank of England — Money and Credit, October 2026 (due 30 November 2026)
• Bank of England — Interest rates and Bank Rate
• MoneyHelper — Personal loans (product norms only)

Disclaimer

This post and all example figures are illustrative only. They are not personalised financial advice, not a credit offer and not a recommendation to borrow, consolidate, overpay, refinance or keep any existing credit. LoanCalc Lab is not a lender or a broker. Rates, fees and terms vary by product and lender. Always read your lender’s disclosure and regulated pre-contract information for your circumstances.