UK Consumers Use Plastic For Everyday Purchases

More and more British consumers use their credit cards for everyday transactions as they seek to take advantage of the plethora of cashback and zero per cent introductory deals on offer.

The UK credit card market is currently awash with various credit cards trying to entice new custom with the offer of various loyalty schemes such as cashback, airmiles and long-term zero per cent deals on purchases.

Figures released by Morgan Stanley reveal that almost 55 per cent of credit card spending is for the more mundane purchases such as petrol and groceries, for example.

The rise in popularity of using the ‘plastic’ for everyday purchases is partly being driven by the need for the card to be in constant use in order for the cardholder to boost their loyalty bonuses.

It certainly is changed days from when credit cards were only either used for those large one-off purchases or for emergencies.

Patrick Muir, marketing director for the Morgan Stanley credit card, said: “ Credit cards have changed enormously over the years and so has the way that people use them.

“ Savvy credit card customers are taking advantage of credit card incentives and beginning to use their cards more and more for everyday purchases. Britons are increasingly more likely to shop around and see how they can be rewarded for their spending with loyalty schemes such as cashback, in addition to taking advantage of the interest-free period that many cards offer.”

This increase in credit card usage has seen the amount of money charged to credit cards in the last six months rise by 11 per cent, with financial experts predicting this figure to rise further in the next three months.

The average consumer in the UK looks set to spend £363 on items for the house and car in the next three months, using their credit cards for these purchases. The next three months will also see £315 spent on groceries, with women the most likely to use their credit card everyday.

Morgan Stanley’s index also revealed the many Brits’ plan to load £331 onto their credit cards in order top escape to sunnier climes between April and June.

However, UK consumers don’t plan to use their plastic for the mundane and essential items in life, with an estimated £104 to be spent on socialising and £79 to be spent on clothes, shoes and beauty products.

Alisdair Milton
23rd May 2006

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