Credit cards Updated:
When you head to the high street, what's your payment method of choice? Chances are, credit or debit cards are beginning to overtake cash, with research from The UK Cards Association finding that card transactions have hit record levels.
The figures show that spending on cards reached £49.6bn in February, up 7.1% year-on-year, a noticeable difference from the £46.9bn recorded in February 2014. The vast majority of that spending was on debit cards, with growth of debit card spending continuing to outstrip that of credit cards: overall, consumers spent a total of £35.2bn on their debit cards in the month, up 7.7% compared with February 2014, and although credit card spending also grew, it posted a slower annual growth rate of 5.6% (totalling £14.4bn).
As well as the value of card spending posting a significant increase, the number of card transactions is also on the rise. In fact, the number of purchases grew by 9.8% year-on-year to hit a record 1.05bn in February, with an average spend of £46.92 per transaction. The figures also revealed clear growth in online transactions, with card spending online now accounting for 24.4% of total card expenditure and 11.3% of all transactions. The average spend is also higher for online purchases, with the average online transaction totalling £103.62, more than double the average for all card purchases.
Richard Koch, head of policy at The UK Cards Association, commented: "Consumers are using their cards more than ever before, with over 435 transactions taking place every second, resulting in a great number of smaller transactions." Happily, people seem to be using their cards sensibly, too, with the figures also revealing that around four-fifths of credit and charge card spending is made by cardholders who repaid the balance in full each month.
Are you one of the many who regularly spend on their credit and debit cards? If so, it's time to make the most of things. For starters, make sure you're one of the four-fifths who pay off their credit card balance each month, thereby ensuring you don't get lumbered with interest. This is unless you want to spread the cost of a large purchase, in which case, use 0% purchase credit cards, which allow you to spread the cost without paying any extra.
And, to really make the most of every single purchase, be on the lookout for cashback credit cards (or current account providers who offer similar deals for paying by debit card). This way, you'll really be getting something for nothing, as you'll get money straight back in your account from everything you buy. Just make sure to be even more vigilant about repaying the balance, otherwise the interest you'll be charged will negate any cashback you earn. Above all, spend wisely, and you can make the most of your flexible friends.
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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