Debit Cards Claim Top Payment Method
Cash usage continues to fall below plastic as Brits switch to debit card spending in a bid to save money.
According to latest figures from the Payments Council, the consumer’s payment method of choice in 2010 was plastic, with cash losing the top spot for the first time. This trend continued and by the end of the year, £26 billion more was spent on debit cards than in notes and coins.
The gap is widening too, as consumers spent £39 billion on debit cards on the high street in the first three months of 2011 which was more than twice the £17 billion spent on credit cards. It is expected total debit card spending this year could reach £320 billion.
“The card spending figures show consumers are feeling the pinch in some areas, but they are still spending,” said Sandra Quinn, Payments Council director of communications.
“It seems that the long dry spell in early spring enticed a lot of us to buy a new barbecue – let’s hope we get the weather to use them!”
Cash machine withdrawals, which account for a significant part of the cash spent, dropped to £44 billion which was down by 0.3 percent from the same period last year.
The fact that more people are spending on their debit cards than credit cards and with cash suggests consumers are keen to spend only what they can afford, as debit card spending helps them to retain control over their budgets.
The new move to contactless payments also means paying by card is faster than ever.
Control over budgets is important at the moment due to the cost of living rising, as petrol saw the biggest increase in spending as prices rose – an extra £900 million from family budgets accounted for this extra cost.