CONSUMERS’ annual spending on cards topped £500bn for the first time across 2013, a report has found.
Debit and credit cards accounted for three in every four pounds spent in shops, up from two in every four just a decade ago, according to the figures published by trade body the UK Cards Association.
The UK Card Payments report found that Britons spent £520bn on UK goods and services using their debit and credit cards last year, marking a 6.7 per cent increase compared with the £488bn spent over 2012.
When spending by overseas visitors was added, the total value of purchases on debit and credit cards in 2013 was £534bn, meaning that spending on cards now constitutes one third (33 per cent) of the UK’s total GDP, up from around one quarter (22 per cent) of GDP in 2003, the report said.
Debit cards can now be found in the wallets of 91 per cent of UK adults, with the total number of cardholders standing at 47.5 million. This is around half a million more cardholders than in 2012, and the report said an “increased proliferation” of bank accounts that automatically issue a debit card has driven much of the increase seen in recent years.
The average transaction value for all debit card purchases in 2013 stood at £44.02 and the average debit card was used to make 94 purchases across 2013. Around 38 per cent of the debit card holding population own two or more cards.
In 2013 there were 30.1 million credit and charge card holders, equating to around 60 per cent of all UK adults. Credit cards were used for 42 purchases on average in 2013, with the typical transaction valued at £69.49.
Over 80 per cent of all credit and charge card spending in 2013 was made by cardholders who repaid the balance in full.
The report said that in a reflection of people’s desire to pay down debt where they can in tough economic times, outstanding borrowing on credit cards has fallen by 15.6 per cent from a monthly average peak of £67.4bn in 2005 to £56.4bn in 2013.
The annual value of card payments is expected to lift from £520bn last year to around £874bn in 2023. This figure is expected to be boosted by card use by young adults who have grown up with debit cards.