Credit crunch or not, Britons kept flashing their plastic over Christmas

Spending

It seems that Britons were still willing to splash out on their plastic last Christmas despite the recession.

Figures from the Association of Payment Clearing Services (Apacs) show that overall spending on debit and credit cards rose by 0.3 per cent in December, compared to the same period a year before.

But look behind the figures and there are signs of consumers reining back. For example, a rise in debit card use made up for a fall of nearly 5 per cent year-on-year in the amount spent on credit cards. Interestingly, the number of purchases made on all cards rose – an indication, perhaps, that Britons were trying to make their money stretch a little further over Christmas by buying smaller gifts rather than big-ticket items.

Sandra Quinn from Apacs says the figures were affected by the VAT rate cut announced in the pre-Budget report and the fact that retailers brought their sales forward: "While the number of transactions was higher than in December 2007, average transaction values fell, no doubt influenced by price discounting by many major retailers and the VAT cut.

"Also, this fits in with what supermarkets were reporting – in that people were opting for cheaper, budget alternatives."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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