Credit card usage falls sharply

| June 27, 2011 | 0 Comments

The British Retail Consortium (BRC) has today reported a fall in credit card usage as consumers look to cash and debit cards for their purchases.

According to a survey by the BRC, which represents 90% of the UK’s stores, shoppers are opting to use their debit cards and cash to avoid borrowing.

However, the number of transactions involving cash fell, although the average amount spent jumped by 13% on an annual basis.

Debit card usage surged by 15.8%, the BRC said.

The report, compiled by the BRC’s annual Cost of Payment Collection Survey includes results from almost 8 billion transactions in store and online, 60% of the UK’s annual retail sales.

Commenting on the report, the BRC’s Director General, Stephen Robertson, said: “Hard-pressed customers are switching to cash and debit cards for the reassurance that they can’t spend what they haven’t got.

“At the same time, use of credit cards has dropped sharply. Cash remains king - used for more than half of all retail payments. ”

The fees associated with credit cards continue to be a major issue and the BRC highlights that they are the most expensive payments to process.

Last year, each retailer paid 1.7p per cash transaction to have the money transported and banked, while the charge for processing a credit card payment was 37.1p, compared with a debit card payment of 9.2p.

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