Is the UK finally catching up to America’s credit culture?

For years, the UK has looked fundamentally different from the US when it comes to consumer credit.

American consumers have long relied on credit cards as a primary spending tool, building credit scores through revolving balances, rewards programmes, and multiple card relationships. The UK, by contrast, has traditionally been more debit-first. Current accounts sat at the centre of the banking relationship, while credit cards often served a narrower role: balance transfers, emergency borrowing, or occasional rewards spending.

That gap is beginning to narrow.

Over the last 18 months, UK credit card borrowing has accelerated, outstanding balances have surpassed pre-pandemic highs, and some of the UK’s largest fintechs are making increasingly aggressive moves into lending. Monzo is evolving Flex from a BNPL-style product into a broader credit-building proposition, while Revolut is preparing to launch credit cards in the UK following its full banking licence approval.

Together, these moves suggest something bigger is happening beneath the surface: credit is becoming strategically important again.

The question isn’t whether credit is growing. It's whether the UK is beginning to resemble the US credit market, or whether a distinctly British version of credit is emerging.

Credit cards are growing faster than almost any other consumer lending category

The most obvious signal comes from the data.

Bank of England figures show credit card borrowing has been growing at double-digit annual rates, consistently outpacing other forms of consumer credit. In late 2025, annual growth in credit card borrowing reached 12.1%, the highest level seen since early 2024, while net borrowing through credit cards hit £1bn in a single month.

Outstanding UK credit card debt has now exceeded £70bn and sits above pre-pandemic levels. Equifax notes that promotional credit card offers remain highly competitive, with around half of newly issued cards carrying promotional terms during peak periods in 2025.

This isn’t simply a cost-of-living story.

While inflation and household pressure have undoubtedly driven some borrowing, lenders are also seeing improving consumer confidence and a renewed willingness among consumers to spend. TransUnion’s Consumer Credit Report found that 43% of consumers felt optimistic about their financial future, while broader credit activity continued to increase across the market.

The result is a market where credit cards are no longer just a legacy banking product. They are becoming a growth engine once again.

That helps explain why both incumbents and fintech challengers are investing heavily in lending capabilities.

Fintech’s next growth frontier is credit

For most of the past decade, UK fintech growth came from payments, current accounts, and subscriptions.

Lending was often viewed as a difficult business: capital-intensive, highly regulated, and exposed to credit risk.

Today, that calculation is changing.

Monzo’s Flex product offers one of the clearest examples. Originally positioned as a flexible buy-now-pay-later product, Flex has steadily expanded its role within Monzo’s ecosystem. Recent enhancements allow users to choose instalment payments directly through Apple Pay at checkout, making Flex feel less like a standalone lending product and more like an embedded spending tool.

More recently, Monzo launched Flex Build, a credit-building proposition designed to help customers establish or improve their credit history. Strategically, that’s significant. Rather than treating credit purely as borrowing, Monzo is positioning it as a long-term relationship product.

Revolut appears to be heading in a similar direction. Following its full UK banking licence approval, Revolut has publicly identified credit cards as a major area of expansion. The company already operates credit card businesses across multiple European markets and now has the regulatory infrastructure needed to bring those capabilities to the UK. Executives have also highlighted unsecured lending, overdrafts, and broader credit products as key priorities.

This follows a familiar pattern. Current accounts helped fintechs acquire customers. Subscriptions improved monetisation. Credit may become the next major revenue driver.

The economics are compelling. Interest income remains one of the most profitable and scalable revenue streams for financial institutions, particularly as interchange revenue faces pressure and customer acquisition costs continue to rise.

Is the UK becoming more like the US?

Not quite. But the similarities are becoming harder to ignore.

The US market has historically been built around revolving credit. Consumers often maintain multiple cards simultaneously, rewards programmes drive spending behaviour, and credit cards play a central role in everyday commerce.

The UK is moving in that direction, but from a different starting point.

According to TransUnion, American credit card balances remain roughly 73% higher than those seen in the UK, suggesting there is still considerable distance between the two markets.

However, several US-style dynamics are beginning to appear:

Credit is becoming embedded into everyday spending: Products like Monzo Flex and Klarna Credit Card are blurring the lines between traditional credit cards and BNPL. Instead of viewing borrowing as a separate financial decision, consumers increasingly encounter credit as a payment option directly at checkout.

Fintechs are building full lending ecosystems: Rather than offering standalone credit products, firms are expanding across multiple lending categories. Revolut, for example, is pursuing a broader strategy spanning credit cards, personal loans, and overdrafts - similar to the approach taken by large US financial platforms.

Data and personalisation are becoming competitive advantages: As AI-powered financial experiences evolve, lenders will be able to deliver more contextual and personalised credit experiences, recommending products and financial actions based on a customer's spending patterns, goals, and financial behaviour.

The UK remains a more heavily regulated market than the US: While credit adoption is growing, lenders face stricter oversight and stronger consumer protection requirements than many of their American counterparts.

Regulation is likely to shape how credit evolves: Consumer Duty, forthcoming BNPL regulation, and ongoing affordability scrutiny mean providers must demonstrate positive customer outcomes and responsible lending practices. As a result, credit growth in the UK is likely to occur within tighter regulatory guardrails than in the US.

What this means for fintech

Credit is quietly becoming one of the most important battlegrounds in UK banking.

For years, fintech competition has centred on user experience, payments, and customer acquisition. Increasingly, the next phase will be about monetisation, and lending remains one of the most effective ways to generate sustainable revenue at scale.

The winners will not necessarily be the firms offering the largest credit limits or the most aggressive rewards. Instead, the opportunity lies in making credit feel intelligent, contextual, and manageable.

Monzo’s focus on credit building, Revolut’s expansion into lending, and the broader growth of embedded borrowing all point toward a future where credit becomes more integrated into everyday financial management rather than existing as a separate product category.

The UK isn’t becoming America overnight. But as fintechs mature into full-service financial institutions, the country’s historically cautious relationship with credit is beginning to evolve.

And for the first time in years, credit cards look less like a legacy banking product and more like one of fintech’s biggest growth opportunities.

Now, let's take a look at some UK credit examples we have on Pulse…

Yonder - Personalised credit experiences

UK lifestyle finance app Yonder offers rewards-focused credit cards targeted at young professionals, with benefits such as zero foreign exchange fees and easy redemption of rewards for curated dining, entertainment, and travel experiences.

It's disrupting traditional providers like American Express by using Open Banking data to assess real-time cash flow instead of relying solely on credit scores, while also offering personalised local rewards, flexible weekly billing, and the ability to top up credit limits for larger purchases.

The Experiences tab blends lifestyle discovery with rewards in a beautifully curated experience marketplace. Users can browse tailored categories like Travel, Fit & Well, and Shopping, while rich imagery and clear merchant cards make every experience feel aspirational and easy to explore. The persistent points balance keeps rewards front of mind, while the transparent earn-versus-redeem toggle clearly shows cash equivalents, helping users make informed decisions.

Detailed partner pages provide redemption tiers, expiry dates, and step-by-step guidance, reducing uncertainty and building trust. With intuitive search, seamless navigation, and contextual booking or shopping actions, Yonder turns loyalty rewards into a genuinely engaging discovery experience.

Monzo - A full lending ecosystem

Monzo exemplifies how fintechs are evolving beyond standalone lending products to build comprehensive credit ecosystems. Monzo has steadily expanded its lending offering to include overdrafts, Flex (BNPL and instalment credit), personal loans, credit cards, and business borrowing products. Rather than treating credit as a single product line, Monzo is creating a portfolio that supports customers across a range of borrowing needs and financial situations.

Monzo Flex puts users firmly in control by making repayment choices transparent, adjustable, and easy to understand. A dynamic repayment slider lets users instantly see how changing their monthly payment affects future instalments and interest costs, helping them make informed decisions with confidence.

Clear breakdowns of upcoming payments, embedded editing options, and prominent “Pay now” actions reduce friction throughout the experience. The ability to repay individual purchases early adds valuable flexibility, while real-time interest calculations and contextual explanations build trust through transparency. A celebratory payment confirmation screen provides reassuring feedback and creates a satisfying sense of progress.

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