Spending on plastic cards slows

Latest figures from APACS, the UK payments association, show that spending on plastic (credit/debit cards) over the Christmas period reached £32.2 billion, with £5.4 billion spent online. Up 4% on the 2006 figures, the figure marks the slowest year on year increase over the same period for credit and debit card spending for 4 years.

The increase was due to the rise in spending on debit cards, which grew by 6.8% to £20.9 billion, although this was less than half of the increase between 2005 and 2006 (15.3%).

Credit card spending at Christmas fell for the second year running - £11.3 billion in December 2007 compared to £11.4 billion for the same period in 2006. There was a decrease of 2.8% in the volume of credit card transactions, down from 197 million transactions for December 2006 to 192 million transactions in 2007.

Overall spending on plastic cards accounted for 64% of total retail sales. There were 690 million plastic card transactions in December 2007, only 3.2% more than during December 2006. This equated to 263 transactions per second throughout the month, compared with 250 in December 2006.

Sandra Quinn, of APACS, says that despite talk of a slowdown once again we spent record amounts last Christmas. However, the increase on 2006 spending was just 4%, which compares to increases of just under 9% over the last couple of years. Worth pointing out too is that credit card spending fell for the second year in a row.

"This trend highlights what we have been seeing over the past few years with people increasingly opting to use their debit card rather than credit card; reflecting that people are thinking more carefully about whether they can afford to borrow," says Quinn.