There were 1.6 billion debit and credit card transactions in the UK in February 2019, increasing by 10.7 per cent when compared to the same month last year and equating to a total value of £60.1bn, figures from UK Finance revealed.
The data also suggested that contactless payments are continuing to gain momentum, with nearly a third of all card transactions in the UK made using contactless cards. In the month, 644 million contactless card transactions were made, rising 20.6 per cent on February 2018’s 534 million. The total value of contactless transactions was £5.9bn in February 2019, an increase of 19.8 per cent year-on-year.
Looking at debit cards alone, there were 1.5 billion transactions on UK cardholders’ debit cards in February of this year, representing a 9.7 per cent increase when compared to February of last year, amounting to a total value of £49.9bn, highlighting 0.9 per cent growth in the year.
However, the number of credit card transactions saw more significant growth, rising to 246 million with a total value of £14.6bn in February 2019. These figures are 4.6 per cent and 1.6 per cent higher, respectively, than those reported in February 2018.
According to UK Finance, while the use of credit cards continues to increase as a payment method, the annual growth rate in outstanding balances stands at 4.9 per cent in February 2019, compared to 8.3 per cent in the same period a year earlier for UK cardholders, indicating that consumers are either repaying their debt in full each month, or repaying it within a shorter timeframe.
Commenting on the rise in the number of credit card transactions, Wagestream founder and CEO Peter Briffett said: “The surge in credit card spending by UK consumers shows that financial stress is rife in many households. Rising wages are masking the financial strain that many families are having to deal with every month just covering the essentials like rent and utilities.
“A worrying number of people turn to credit cards simply to keep their heads above water. It's far too tempting to pay on credit as a stop-gap until the next payday, but many feel they don't have any alternative. This simply leads to a cycle of debt that is impossible to break free from.”
Briffett argued that “more needs to be done” to raise awaresness of the dangers surrounding debt and an over reliance on credit cards, particularly amongst those on lower incomes, who face a wages shortfall each month, with no emergency fund to dip into.
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