Consumers spent a record £32.2bn on credit and debit cards during December – but the rate at which spending is rising continues to slow.
Total plastic spending during the month rose by just 4 per cent year-on-year, the slowest annual increase for four years, the payments body Apacs said yesterday. The increase was driven by a 6.8 per cent jump in spending on debit cards, which reached £20.9bn, although the gain was less than half of the rise of 15.3 per cent between 2005 and 2006.
At the same time, credit card spending fell for the second year running to £11.3bn, compared with £11.4bn during December 2006. There was also a 2.8 per cent fall in the volume of credit card transactions, which dropped to192 million. Overall spending on credit and debit cards accounted for 64 per cent of retail sales. About 690 million transactions took place during the month, the equivalent of 263 per second, compared with 250 per second in December 2006.
Sandra Quinn, director of communications at Apacs, said: "Credit card spending fell for the second year in a row... People [are] opting to use their debit card rather than credit card, reflecting that people are thinking carefully about whether they can afford to borrow."