UK credit and debit card spending on the rise

A total 1.8 billion debit and credit card transactions were made in the UK during June, a rise of 42.4% compared to June 2020.

New UK Finance figures suggested this was heavily influenced by last year’s lockdown restrictions but the banking body highlighted that the total was still 15.8% higher than June 2019.

UK Finance also stated that the the total spend across these transactions had a value of £67.4bn, which was was 19.1% higher than June last year, and a rise of 16% on June two years ago.

Commenting on the figures, AJ Bell head of personal finance, Laura Suter, said: “We’re becoming a nation who shuns debt and sticks to debit cards instead. Over the past two years we’ve seen the amount spent on credit cards fall, while the amount on debit cards has risen by almost a quarter.

“If we compare spending in June this year with June 2019, in pre-pandemic times, the amount we put on credit cards fell by 1.5%, while the amount spent on debit cards increased by more than 22%.”

Suter also suggested that the “silver lining” to come out of the pandemic is that many people were able to pay off debt and shore up their savings.

“That means that many now don’t need to put spending on their credit cards, as they have sufficient spare cash to pay for stuff,” she added. “As a nation we’re continuing to pay off our credit card debt too, with total balances on credit cards dropping by 7% in the past year as we’ve paid off more than we spent.

“However, despite slashing spending and saving money in the pandemic many people have already forgotten their frugal ways and have returned to spending with gusto. The amount spent on debit cards in June was £60.5bn, around £11bn higher than two years previously.”

UK Finance’s figures also revealed that among the total of card transactions, contactless payments accounted for 51% of all credit card, and 66% of all debit card payments.

There were 1.17 billion contactless card transactions in June, a total that was 73.8% more than the 673 million in June 2020, and 69.6% more than the 689 million in June 2019. June’s total value of contactless transactions was £14.2bn, which was a 66.2% jump on the £8.5bn in June last year, and a 122.4% increase on £6.4bn on June two years ago.

As part of this, the number of contactless credit card transactions was 92.4% higher than June 2020, and 39.9% more than in June 2019.

Suter added: “There’s still a place for credit cards, with people putting pricier items on credit, as fewer credit card payments are contactless when compared to debit cards – suggesting they exceed the current £45 limit.

“Contactless payments have soared in the past two years, as the limit was raised from £30 last year, and this will no doubt leap again when the limit jumps to £100 next month.”

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