Figures released by UK Finance today show that consumers have reduced the amount spent on credit cards year-on-year, while debit card spending has increased.
According to the figures, during October 2019 consumers spent a total of £16.6bn on credit cards, which was a 2.7% drop on the total spent during October 2018. UK Finance also found that credit card debt grew by 3.3% during October 2019, which, although is a rise in debt, is significantly down from its recent peak of 8.3% at the start of 2018.
While credit card spending fell, during October 2018 debit card spending saw a 2.0% increase year-on-year, resulting in a total spend of £51bn during the month. Contactless payments were also on the rise, with a 10.3% year-on-year increase in the number of contactless transactions on credit and debit cards during October (761m in total).
The growth in debit card spending and increase in contactless popularity could be of concern for those campaigning to save cash payments. Last year, we reported that one in 10 UK adults were choosing to live a largely cashless lifestyle, with 69% of UK consumers using contactless payments, which included 61% of over-65s making contactless payments in 2018. However, campaigners are arguing that the move towards a cashless society could negatively impact many consumers, such as those who live in rural areas, who are increasingly becoming unable to access cash despite needing it to pay for services and goods.
There have been some moves in recent months to make cash more available, most notably with 29 banks signing up to a new Banking Framework agreement with the Post Office, which came into effect last week. Under this agreement, customers of participating banks are able to withdraw cash, deposit cash and cheques, and access change and balance enquiries at their local Post Office.
Commenting on the UK Finance card spending figures, Rachel Springall, finance expert at Monefacts.co.uk, said: “This data covers a period where consumers may have used a credit or debit card in the run-up to the festive season. Borrowing on a debit or credit card is convenient and there is also protection for consumers too. Those who use a credit card are protected under section 75 of the Consumer Credit Act, whereby if they spend over £100 or up to £30,000, their card firm can refund them in the event such service or goods have failed to be supplied or are at fault. We may be far from a cashless society, but it is clear to see the benefits of contactless payment technology and how this may impact consumers who prefer cash.”
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.
