Britons putting it all on plastic

Credit card spending in Britain is soaring, according to a new report, with card transactions accounting for 60 per cent of household spending last ye

14:45 17 August 2005

Credit card spending in Britain is soaring, according to a new report, with card transactions accounting for 60 per cent of household spending last year.

Analyst group Datamonitor's UK Plastic Cards report shows that card transactions, including debit as well as credit cards, amounted to 436 billion in 2004.

Credit card spending leapt nine per cent to almost 118 billion, while charge card spending went up five per cent to just over 26 billion.

Commenting on the report, author Kieran Hines said that consumers were now "more comfortable" using cards for everyday transactions as well as borrowing.

"Cards are swiftly becoming the dominant payment method of choice for a growing number of consumers in the UK, continuing to replace both cash and cheques," he added.

The one area to show a decline was the use of store cards, which showed a drop of 17 per cent to just 4.3 billion. This is thought to be due to greater consumer awareness of their costs.

Tougher competition between credit card providers is also believed to be a contributor towards lower interest rates, making credit card spending an even more attractive option for consumers.