Expected fall in credit card spending this year

Over the past couple of years many people have become increasingly reliant on their credit cards in order to fund their day to day spending, as money has become tight due to the financial crisis and the recession. Many people have used their credit cards to purchase day to day essentials and even to pay bills over this period.

However, according to one recent report the level of credit card spending is set to fall over the course of this year in the UK, with figures predicting a fall of 2.7 percent compared to the previous twelve months. The information was released by Datamonitor, and suggested that spending on credit cards for this year would total £110.59 billion.

Whilst the company predicted that credit card spending would fall this year compared to last year it also went on to indicate that credit card spending would increase once again in 2011. During 2011 it is thought that credit card spending will increase once again, reaching levels of around £113.37 billion. At its peak credit card spending reached £121.4 billion in 2008.

There were also a number of other findings in the report, including figures showing that last year the number of credit cards that were issued fell by 10 percent. There was also a decline in the value of the average transaction, which fell to £62 and could fall to below £61over the course of this year.

Gilles Ubaghs, a financial services analyst at Datamonitor, said: “This decline in transaction values is problematic for card issuers, but is not as severe as was initially feared at the beginning of 2009.”

In a separate report an analyst from the company Defaqto stated recently that new credit card laws that had been brought in were likely to benefit credit card customers in the UK.