Cash is no longer king. Debit cards passed a historic milestone over the August bank holiday when the running total of debit card spending (£272bn) finally overtook the cumulative amount of cash spent (£269bn) in the economy.
The number of debit-card purchases rose 10 per cent this summer compared with last, with an additional 1.6 million daily transactions between July and September. The amount spent rose almost 11 per cent. Debit cards were also used three times more often than credit cards in the third quarter of 2010.
As a further indication of the move away from cash, withdrawals from cash machines fell 1.5 per cent in the third quarter, compared with the same period in 2009, a decline in real terms of almost 5 per cent.
Sandra Quinn, of the Payments Council, the banking industry body, said: "Cash is too cumbersome for many consumers these days. They prefer a card for anything more than the smallest transactions. Having quickly supplanted cheques and then claimed the scalp of credit cards, they have now usurped cash's throne too."
In the third quarter of 2010, the total outstanding balance on our credit cards fell to its lowest level since 2003, showing that consumers are repaying debt.