Christmas credit card spending to decline
A shift in attitude by consumers means for the first time in a decade credit card spending is set to fall this Christmas.
Britons are expected to spend £400 million less on credit cards this year, making it the first fall in over a decade, the payments organisations APACS is saying.
This is believed to be the result of consumers taking advantage of the chip and PIN trend in debit cards.
APACS said “Credit card spending is likely to fall this December by 3.5 per cent to £11.1bn, which is down £11.4bn from last year.”
The decline comes despite APACS predicting an 11 per cent increase in expenditure from £44bn last December to £48.7bn this time around.
Much of that increase will come from debit card expenditure, which is expected to rise by over 20 per cent to £14.8bn, APACS added.
“Although we actively encourage people to make sure they know how and when they are going to pay back any money they spend on their credit cards, there are some situations where they are the obvious choice for consumers,” said Sandra Quinn, APACS director of communications.
“Not only do they remain ideal for high-value items which enjoy additional protection under the Consumer Credit Act, every canny consumer is well aware of the various financial benefits credit cards can offer: whether it’s making use of the interest free period to forestall payment, earning points on a loyalty scheme or, of course, cash back.” She added
“Debit cards are increasingly replacing cash and cheques for our everyday purchases,” said Sandra Quinn.
“This trend has definitely been helped by chip and PIN which has made paying with plastic faster and safer, so we’re more likely to whip out the plastic for small value transactions,” she added.
Consumer spending on cards during December is usually more than 10 per cent higher than other months.