Credit card repayments are rising according to APACS

There has been a reported shift in the pattern of cardholders spending habits. It would appear the amount of spending is levelling off and people have taken more of an interest in repaying larger sums each month. Also there has been a significant upsurge in the use of debit cards as opposed to credit cards. That said, when purchasing larger, more costly items, consumers do still lean more towards the credit card and the security and peace of mind that can often bring.

During the course of one of APACS’ regular reviews, figures show the amount spent on credit cards in the UK is up by one per cent to £124.1 billion (from £122.8 billion in 2004) whilst the number of transactions has fallen by one per cent to 2.1 billion. 

In addition Bank of England figures reveal the highest proportion of repayments since 1998 - 95.3 per cent.   

Figures from this report also reveal that the number of cardholders repaying their credit card balance in full each month has grown from 56 per cent to 59 per cent in 2004. Another interesting fact that emerges is that an increasing number of cardholders are making their repayments by direct debit.

According to Sandra Quinn (Director of Communications at APACS), in August 2006,  the Bank of England’s latest figures show credit card repayments overtaking spending for the FIRST time.

APACS’ report also shows Debit Cards are still THE  most popular plastic card and are much preferred to cheques and/or cash. It staes that over the year:

• In retail outlets Debit card spending exceeded cash spending for the first time ever. The figures show debit card spending at 37 per cent (£89 billion) of the total £240 billion spent, against cash at 34 per cent (£81 billion).
• In 2005 the number of personal debit cardholders to 40.8 million(an increase of 3%).
• The number of debit card transactions (both spending and cash withdrawals) per cardholder has reached 159 per year in 2005 - up from 77 transactions per year just ten years ago.

The report also looks towards what the future could possibly hold for plastic cards. Over the next ten years debit cards are expected to be the fastest-growing way to pay in the UK. Let’s not forget how easy and accessible purchasing items over the internet has become. Since many homes have at least one computer in them nowadays, ordering items online and paying with our plastic cards has increased FIVE times in the last five years. E-commerce accounts for five per cent of all personal card payments and by 2015 it is estimated that internet purchases will account for over twenty per cent of personal credit card payments within the UK.