Shoppers splash out with plastic
Wednesday 29 March 1995
Spending on credit and debit cards jumped last month, with consumers continuing to switch from cash to cards for making payments.
The amount paid by plastic came to £4.9bn, which was 18 per cent higher than in the previous February and equal to just over two-fifths of total retail spending.
Use of debit cards has grown even faster than spending on credit cards, according to the Credit Card Research Group, which collects statistics on all payments by card in the UK.
Debit payments rose 24.8 per cent in 12 months, and credit card spending by 14.6 per cent. Over the same period the value of retail sales rose by only 4.6 per cent.
Reflecting the pattern of sales, credit and debit card spending has grown fastest in sectors such as food and drink (26 per cent up year on year) and services (30 per cent higher). So have plastic payments in outlets such as record and book stores, computer shops and pet shops.
Card payments in housing-related stores - such as DIY shops, garden centres and electrical goods retailers - grew at a more sedate pace, rising 7 per cent in the year to February.
Elizabeth Phillips, director of the Credit Card Research Group, said: "Spending by sector is mirroring the pattern of the economic recovery."
Economists suggest that there is an element of "distress borrowing" in the strong credit card figures. But in the main, the plastic payment boom reflects the rapid spread of the number of outlets that accept cards. This has been very noticeable in the case of food and drink retailers, which now account for about half of all debit card spending and an eighth of credit card spending, with an average transaction value of just over £40.
The average credit card payment last year was £45, and the average debit payment £28. Ms Phillips said: "People tend to use debit cards for cheaper transactions. It is replacing the use of cash and cheques."
According to Peter Spencer, professor of financial economics at Birkbeck College in London, there has been a progressive switch away from cash for two decades, with the exception of a small rise in cash payments in 1993.
The reason was the improved technology for using cards to make payments, he said.
- 1 Double chins could be 'cured' without surgery or dieting using new injection
- 2 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 3 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 4 Christian blogger says she will not wear leggings in public because they entice men and cause them to look at her 'lustfully'
- 5 Thank heavens for Louise Mensch and her foul-mouthed tweets to world leaders
Scientists discover way to unboil an egg – and the results are not as pointless as that sounds
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
iJobs Money & Business
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...