Cards overtake cash as preferred way to shop

On August 30 the amount of money people had spent on debit cards since the beginning of the year overtook the value of transactions paid for in cash for the first time at 272bn, against 269bn for cash, says the Payments Council.

The value of purchases made using debit cards rose by 10 per cent during the third quarter of the year, compared with a year earlier, to 73.1bn, with an additional 1.6 million transactions carried out every day.

People also used their debit cards three times more often than credit cards, with 1.7 billion debit card transactions carried out during during the three months, compared with just 500 million credit and charge card ones. The group said credit card spending had increased by only five per cent since 2005, while in real terms it had actually declined by a 10th.

The fall in the popularity of credit cards was also illustrated by a 14 per cent fall in the number of credit cards in issue during the past five years to 60.7 million, while the number of individual cardholders has dropped from 31.7 million to 30 million.

There was also a 1.5 per cent fall in cash withdrawals made during the third quarter, compared with the same period of 2009 – a decline of nearly 5 per cent once inflation is factored in – as consumers used debit cards.

Sandra Quinn, director of communications at the Payments Council, said: "We now expect our debit cards to be accepted everywhere we go – in pubs and clubs, at the corner shop, online and on the high street."

The use of cheques continued to decline rapidly, with 104 million fewer written during the past year.

They are due to be phased out by October 2018 with the Cheque Guarantee Card Scheme ending by the end of June next year.