• Consumers spent over £25 billion per month using plastic cards in the first half of 2006
• Shoppers chose debit cards for 70 per cent of these purchases

APACS, the UK payments association representing card companies, today [27 July 2006] released June 2006 spending figures, which show that spending on plastic cards over the month amounted to £26.4 billion and that in the first six months of 2006 a record £151 billion of purchases were made using plastic.

Debit cards continue to dominate as the more popular method of plastic payment, accounting for 70 per cent of the purchases made in the UK in the first half of 2006.  Actual spending in June on debit cards reached £16.2 billion and credit card spending amounted to £10.2 billion.  Since the beginning of 2003 the way we use our cards has changed; we now spend much more on our debit cards than on our credit cards.  Before 2003 monthly spending on plastic had been roughly equally split between debit and credit cards. 

543 million purchases were made on plastic in June 2006 (377 million on debit cards and 166 million on credit cards) an increase in 4.9% per cent on June 2005.  Of these purchases, two-thirds took place on the high street, with the strongest contribution in the food and drink and household sectors, reflecting the warm weather and the impact of the World Cup.

Sandra Quinn, director of communications at APACS, said:

“Our figures show that while there are certain situations when we prefer to use a credit card rather than a debit card, there is a continuing trend to pay more frequently by debit card.  This could reflect the fact that as a nation we are keeping tighter control over our finances; recent Bank of England figures show that we are continuing to payback a higher proportion of our credit card bills than we have historically(1). We expect this trend to continue, with debit cards being used more and more extensively for lower-value payments that are currently made by cash. 

Credit card spending did account for a total of over £10 billion of June’s plastic card purchases – we do welcome the convenience and security they bring and continue to use them for bigger items and when buying online or overseas.”

Table showing spending in the first half of 2006 compared with 2005

UK consumer spending	Six months to June 2005	Six months to June 2006	Percentage change
On plastic cards	£141.7 billion	£151.0 billion	+ 6.6%
On debit cards	£81.1 billion	£92.5 billion	+ 14.1%
On credit cards	£60.6 billion	£58.4 billion	- 3.5%

ENDS

APACS is the UK payments association. It provides the forum for the UK's financial institutions to come together on non-competitive issues, to develop banking systems for the future and to provide innovation and developments in payments. It is also the banking industry voice on payments issues such as plastic cards, payment fraud, cheques, electronic payments and cash and is the banking organisation coordinating chip and PIN roll-out.

(1)  Bank of England data for May 2006 showed repayments as a percentage of credit card gross lending averaged 99.7 % over the first five months of 2006.  The same figure for May 2005 was 96.2%.