Brits ditch credit cards for debit
UK consumers are spending more on debit cards and less on credit cards since the onset of the recession, payments association Apacs revealed this month.
Brits spent 4% more on their debit cards in the first three months of this year compared to the year ago period, whilst credit card spending dropped 3% despite an overall rise in plastic card use.
Plastic spending increased 5.4% on year during the first quarter to £94.2 billion, whilst the number of purchases made on cards increased 6.5%.
The popularity of cheques continued its downward trend, with the number of cheques cleared dropping 10.6% and total value down 9.4%.
Debit cards accounted for 74.5% of all plastic card purchases during the first quarter.
Sandra Quinn, Apacs director of communications, said its too early to tell whether the decline in credit card use is due to the recession.
“It is hard to say if we are seeing a shift towards people spending what they have, rather than what they can borrow,” Quinn said.
“It will take another couple of quarters before we can say that.”
Although credit cards are being used less, credit card repayments have remained consistent despite the recession.
Quinn attributed this to people in employment using the extra money from mortgage repayments for paying off other debts.