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Spending on debit and credit cards shows no signs of slowing down. If anything, it's continuing to ramp up – thanks in no small part to the rise of contactless – so much so that consumers spent a whopping £57.8bn on cards in July, an increase of 7.4% from July 2016, when £54.2bn was spent. Are you making the most of your plastic?
The figures, from UK Finance, reveal strong growth in all aspects of card spending, with the total number of card payments rising from 1.24bn in July 2016 to 1.39bn this year. Contactless payments continue to be the driving force behind much of this activity, now accounting for 36% of total purchases, compared with 19% a year previously, highlighting the ongoing migration towards this convenient method of payment.
Online spending also continues to surge, rising from £12.5bn in July 2016 to £15.7bn this year and now accounting for 27% of total card spending, up from 23% a year ago. However, debit card spending continues to lead the way, accounting for £41bn of all expenditure compared with credit cards' total of £16.7bn, suggesting that consumers continue to be sensible with their spending, rather than putting the lion's share on credit.
Richard Koch, head of Cards at UK Finance, commented on the findings: "Coinciding with the 'days-out' holiday season, leisure and entertainment activities accounted for significant spend on cards during July. Contactless cards were used for one in three purchases as consumers continue to make lower-value transactions using their cards, rather than cash."
Whether you're all about contactless, can't get enough of online shopping or simply want a convenient method of payment, getting more from your plastic is a must. This applies to debit as well as credit cards – these days, banking providers are actively competing for your business, giving you the chance to get something back from your debit card spending.
Take TSB, for example. Its Classic Plus high interest current account gives you £5 cashback if you make 20 or more debit card purchases in a month, together with an additional £5 for having two direct debits and a 3% interest rate on balances up to £1,500. Halifax's Reward Current Account also offers cashback at selected retailers, together with other perks, as does Nationwide's which offers the top in-credit interest rate of 5% alongside cashback deals.
Credit cards can still be a viable way to get something extra from your everyday spending, despite reward perks having been cut in recent years. This just means you'll need to do your research to make sure you're getting the best credit card possible, whether you want straight up American Express easily wins the day) or , for example.
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