Brits go on record credit and debit card spending spree

Brits charged a record £31 billion to their credit and debit cards during the festive period in December according to the latest figures published by APACS, the UK's payments association. Equally amazingly, 669 million transactions involving plastic card payments were recorded in December - which equates to 250 payments taking place every second of every day and night in the UK – up six percent from the previous year.

While the APACS figures show that Brits were charging record amounts to their plastic cards in December, they also, interestingly, reveal that consumers in the UK were more likely to charge their festive purchases to a debit card than a credit card. The total amount charged by Brits to debit cards in December 2006 rose £2.6 billion to £19.6 billion (with the number of transactions also increasing from 426 million to 472 million) from the same period in 2005. Meanwhile, credit card spending actually fell year-on-year, from the £11.5 billion we charged in 2005 to £11.4 billion in 2006. By volume, credit card transactions also fell four percent to 197 million transactions.

Commenting on the latest figures to be released by APACS, Sandra Quinn, director of communications at APACS, said: "We spent record amounts this Christmas and record amounts on our cards. The trend that we have seen over recent years of cards replacing cash and cheques on the high street continued this Christmas. Spending on debit cards in particular has dramatically increased and now stands at almost double the level of spending on credit cards. Our figures show that cardholders are becoming more responsible in the way that they borrow and are clearly focusing on repayments, with the majority of spending being done by debit rather than credit cards."

The APACS figures also add further evidence to recent figures release by the British Bankers Association (BBA) that there is a growing trend among Brits to move away from credit card spending: echoing recent comments made by Ashley Ramsey, marketing manager of Standard Life Bank, that a "positive shift in attitudes" was now well underway among British consumers.

Unlike the behavior of UK consumers in the high street, however, APACS estimates that Brits are more likely to charge their online purchases to their credit cards. Overall, online shopping accounted for an estimated £3 billion of the total amount charged to plastic cards in December. However, even the reluctance to change habits and use debit cards for online purchases may well be based on solid grounds: credit card purchases in the UK over £100 are protected under the Consumer Credit Act and also help to prevent the chance of fraud being carried out on current accounts.

Tom Smith
6th February 2007

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