Record spending on the cards

A RECORD £321 billion was spent on plastic cards in the United Kingdom last year.

A report issued yesterday by APACS, the UK payments association, has revealed a three-fold increase in spending on cards in the past decade, from £87bn in 1996.

Plastic now accounts for nearly one third of total consumer spending .

The remaining £710bn is made up of cash, automated payments and cheques.

The amount paid by cheques continued to fall, down a further £22bn, or 12 per cent, to £164bn.

The APACS report "The Way We Pay 2007: UK Plastic Cards" revealed £195bn was spent on debit cards last year, accounting for 61 per cent of the total expenditure on plastic.

Some £126bn was put on credit cards - 39 per cent of the card market.

In 2005, cards exceeded cash in all retail spending for the first time. The gap between cards and cash accelerated in 2006, with cash spending of £274bn.

The latest figures highlight the extent to which debit cards continue to soar in popularity, while the use of credit cards and cash is stagnating, having reached a plateau in the past three years.

APACS said this trend was in line with its own expectations.

It put this down to the convenience and ease of use of debit cards, and said it indicates consumers are being more responsible, by using their debit cards rather than credit cards.

Sandra Quinn, the director of communications at APACS, said: "The last ten years have seen a rapid rise in the popularity of plastic, with debit cards showing particularly strong growth. Consumers enjoy the ease and convenience plastic cards bring, and today most retailers and supermarkets take plastic, as do an increasing number of professional service providers.

"Over the next ten years, it is expected spending on plastic cards will continue to dominate the payments arena, accounting for 89 per cent of growth in UK payment volumes by 2016."