Credit card borrowing rises for third month in a row

Credit card borrowing has risen for the third month in a row, according to the Bank of England.

The amount owned on credit cards has risen by more than £1bn, bringing the total figure now owed to £55.7bn.

During the current enonomic downturn an increasing amount of SME owners are having cash-flow problems and are using credit cards to finance their businesses.

"We call it the credit waterfall effect, which is when people who are faced with rising mortgage costs and lower incomes resort to short-term credit to maintain their standard of living," said Richard Thomas, a partner at Pricewater-houseCoopers.