Credit Card Spending Not Increasing?

WEDNESDAY, OCTOBER 25, 2006

In a new report the Association of Payment Clearing Services (Apacs) says that credit card spending may have “leveled out” as even though credit card spending increased just 1% over the past year, the amount of transactions also decreased by 1%. During the same period, the number of people who fully paid off their credit card debt increased from 56% to 59%.

Contradicting most other reports, Apacs says that people have become more cautious about how they spend and use their credit cards.

"Our figures show that UK credit cardholders are reining in their spending and concentrating on repayments - a trend which has continued throughout this year," said Sandra Quinn of Apacs. “Nervousness about economic growth could well have contributed to the reduction in credit card spending and higher repayments, alongside media speculation about whether consumers are borrowing responsibly."

Still, the use of debit cards has continued to grow and they have continued to rise in popularity ever since they overtook the use of credit cards in 2001. In 2005, more people used debit cards to make payments, than they did cash as £89 billion was spent using debit cards compared to just £81 billion in cash.