How often do you use your credit or debit card? Chances are, it's quite a lot. Card payments are increasingly becoming the method of choice for a lot of consumers, and it isn't only for high-value purchases either.
Research from The UK Cards Association has revealed that the number of card purchases totalled 993 million in June – an impressive figure, but even more so when you realise that this is an increase of 9.2% on the same month in 2013. Total spending also increased over the year, this time by 7.2%, to total a whopping £47 billion in the month.
However, given the slightly lower growth rate in card spending, it means the average transaction value has actually fallen in the last year. In June 2013 the typical card payment would have totalled £48.91, but this had fallen to £47.51 in June this year – a drop of £1.40 in 12 months.
This indicates a clear shift in consumer behaviour, as consumers are increasingly choosing to use their cards – be it debit or credit varieties – to pay for smaller purchases. Arguably, the rise of contactless payments, which are typically only allowed for purchases of up to £20, has added to this trend, with consumers choosing the convenience of making a contactless payment rather than fishing around in their wallet for a few coins.
This assumption can be backed up by figures. According to The UK Cards Association, the number of monthly contactless transactions has more than tripled in the last year (reaching 22.1 million), with consumers spending a total of £146.1 million using their contactless cards in May 2014. The average contactless transaction is just £6.60, highlighting how contactless payments could be contributing to the overall card spending trend.
Richard Koch, head of policy at The UK Cards Association, commented on the findings:
"We've seen the average value of a card transaction drop over the last year as consumers increasingly choose to use their cards to pay for smaller purchases. In the retail sector, the average shop is now less than £34. An increase in small transactions online and the use of contactless cards for lower, everyday sums is partly behind this significant trend."
So, are you flexing the plastic or flashing the cash? Chances are it'll be a combination of the two, but reaching for the plastic is undeniably becoming more of an instinct for many shoppers. If you're one of them, make sure your card works as hard as possible – ideally by choosing one which offers cashback or rewards – and you can enjoy convenience as well as added benefits.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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