Credit card debt fell sharply between April and May this year, according to data released by the Central Bank today.
Maturing SSIAs may be responsible for a fall in credit card indebtedness during May. Image: Frank Miller.
The figures show that card indebtedness dropped from 17.1 per cent to 11.5 per cent as people cleared their credit cards with €217 million worth of repayments in the period.
Maturing SSIAs appeared to have allowed people to pay off large amounts of credit card debt resulting in the "largest ever fall in the level of outstanding indebtedness", the bank said.
This was contrary to the situation with business credit cards, which saw a decrease in payments received in the same period.
Irish annual private sector credit expansion fell to a new three-year low in May as annual mortgage lending growth fell to its weakest since July 2002 but for both measures lending levels were above where they stood in April.
The Central Bank, which has welcomed a sharp cooling in house prices and the accompanying slowdown in rapid rates of borrowing growth, said today that the adjusted annual credit growth rate was 20.9 per cent in May.
That was down from 22.2 per cent in April and the lowest growth rate since February 2004.
"Private-sector credit (PSC) recorded its highest month-on-month increase in 2007," the bank said in a statement.
"The rise of €5.6 billion, however, was some €1 billion lower than in the same month last year and, as a result, annual growth rates continued their downward trend."
Growth in residential mortgages also declined, falling to 20 per cent year-on-year from 21 per cent in April, but the central bank said that it too had put in a relatively strong performance last month.
"Despite falling house prices, higher interest rates, and reports of a marked reduction in housing market activity, there was a net increase of €1.5 billion in residential mortgages during May, which was above the average for the year so far."
Overall, total lending by credit institutions in Ireland to private residents increased by €5.6 billion, or 1.7 per cent, in May to €337.4 billion ($453.7 billion).
Irish credit institutions in accounted for €227.8 billion of the euro-area's broad money supply (M3) in May, a monthly increase of €6.4 billion, or 2.9 per cent.
Additonal reporting Reuters