A total 343.8 million credit card transactions were carried out in July, a 9.8% increase on the same month in 2021, new figures published by UK Finance have shown.

The total spend of £18.8bn on credit cards, by UK cardholders both in the UK and overseas, was also 17.1% higher than July 2021.

However, the banking body’s figures also revealed that outstanding balances on credit card accounts grew by 10.8% over the 12 months to July. More than half (51.5%) of outstanding balances also incurred interest, which compared to 53.4% last year.

In terms of debit card transactions, July saw 1.9 billion transactions which was 0.6% rise on the same month last year. The total spend of £57.5bn by UK cardholders during the month, however, was 6.3% lower than July 2021.

Commenting on the figures, VP e-commerce and financial services at Trustly, Ciaran O’Malley, said that both the UK and European payment markets have seen “a period of exceptional volatility” over the past year.

“Businesses are facing fundamental challenges as costs are being driven up by inflation and supply chain issues,” O’Malley commented. “Meanwhile, growing market uncertainty in the UK is intensifying the effects of the cost of living crisis, impacting demand for discretionary spending among consumers.

“Despite this, during July we saw the volume of debit card transactions rise by 0.6%, with the total spend at £57.5bn. Digital payments also continued to take a greater market share.

“We are on the doorstep of an open banking revolution, with a broad range of UK businesses planning to go live with open banking solutions in the next six months. Indeed, we expect account-to-account transactions to become a more widely used payment method. The logic for business is compelling. Increasing sales and customer satisfaction while reducing cost is a very attractive combination for any business, in particular in the current economic climate.

“As macro-economic events and sentiment begin to hamper household spending capabilities, the usual winter rise will likely be modest compared to previous years, making seamless payments for e-commerce even more relevant.”

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