Brits Spending More On Their Debit Cards Than Cash Or Credit Cards

According to the latest figures released by the Association of Payment Clearing Services (APACS), for the first time Brits are now spending more on their bank debit cards than they are cash or charging to their UK credit cards.

Figures released by APACS show that Brits spent £89 billion on their debit cards in 2005, a figure up from the £82 billion we spent the year before. During the same period cash spending dipped slightly from £84 billion to £81 billion and credit card spending stayed the same at £61 billion.

With credit card spending in the UK in 2006 looking like it will have an annual fall for the first time since 1994, many Brits now seem to have grasped the fact that debit card spending is more prudent than credit card spending. While debit card spending offers all of the same benefits of credit card spending, it comes without the high cost of use and interest charges as the money is debited from the card user’s account almost instantaneously. Moreover, with credit card fraud being seen as a major peril of having a UK credit card, keeping tabs on the money being spent out of users’ current accounts with a debit card is easier than having to wait for monthly credit card statements.

In addition to taking over cash as being the most popular form of payment in the UK, the debit card also looks to have put the final nail in the coffin of cheques, with cheque spending falling from £11 billion to £9 billion. Indeed, a number of UK retailers will no longer accept payments by cheque, so bad has the situation for cheques in the UK become.

Nevertheless, while debit cards have gained significant ground in the last 10 years, with over 30 million Brits having a UK credit card, it’s hard to imagine that the UK credit card is going to have the same demise as the UK cheque has seen. In fact, a separate report by Datamonitor shows that Brits are now charged 50% more to their UK credit card in 2005 than they did in 2001.

Rising interest rates and nervousness about the state of the general economy will, however, likely see Brits keeping to retail spending on their debit cards over the coming Christmas and New Year holiday season, with credit cards being kept back in store for emergency use only.

The only question that remains then is whether or not we are seeing the last days of cash spending in the UK?

Richard Smith
17th October 2006

More Information:

• The Future Credit Cards
  When the Franklin National Bank in New York started giving their loan customers cards to buy goods from retailers in 1951, little did they know they had started a revolution in spending. When American Express, a traveller’s cheque company, followed suit with their charge card in 1958, card holders began to enjoy the freedom such cards gave them.
• Do You Need To Have More Than One Credit Card?
  Deciding whether or not to have more than 1 UK credit card can be a difficult decision to make. On the one hand, you want to keep a careful control on your personal finances and having numerous creditors makes this difficult. On the other hand, it can be convenient to have more than one credit card, for example in an emergency. So, should you have more than 1 credit card?

More UK Credit Card News
Try our feed