Apacs' latest publication The Way We Pay 2008: UK Plastic Cards shows that in 2007, for the 7th year running, debit cards continued to dominate consumer card spending, accounting for 62 per cent of the total plastic card spending during the year.
UK plastic card payments to UK merchants, retailers and service providers totalled £354 billion in 2007 - over three times the amount of ten years ago (£103 billion in 1997) and a 10 per cent increase on the 2006 figure (£321billion).
UK consumer spending(1) by value
| | 1997 | 2006 | 2007 | % change from 2006-2007 | % change from 1997-2007 |
| On plastic cards | £103bn | £321bn | £354bn | +10% | +243% |
| On debit cards | £45bn | £195bn | £221bn | +13% | +390% |
| On credit & charge cards | £58bn | £126bn | £133bn | +6% | +130% |
| Automated payments(2) | £88bn | £283bn | £312bn | +10% | +251% |
| Cheques(3) | £153bn | £196bn | £194bn | -1% | +27% |
| Cash | £235bn | £264bn | £265bn | +0.4% | +13% |
Sandra Quinn, director of communications at APACS, said: "Over the past 3 years we've seen a pattern emerge: debit cards have increasingly become consumers' first choice over other options, such as cash, cheques and credit cards. And whilst these figures are for last year, surprisingly despite lots of speculation, all the early indications from our figures so far for this year show that there has been no sudden spike in credit card spending. In fact, credit card spending up until the end of May increased by only 1.2% - below the rate of inflation, and the average value of a credit card purchase in a supermarket has actually fallen by £1 to £34.33(4).
"Interestingly the report also shows that last year debit cards even gained ground in areas where credit cards have traditionally had a firm hold - particularly on the internet. We would, however, continue to remind customers that because of the additional consumer protection benefits credit cards provide, you may find a credit card to be a more sensible choice online."
The £354 billion spent on plastic cards during 2007 equated to 31% of total consumer spending in the UK, with the remaining £771 billion made up of cash, automated payments and cheques.
Debit cards were used to make 4.9 billion purchases in the UK, and by 2017 it is projected that there will be around nine billion debit card payments. Over the last decade debit card spending has increased five fold from £45 billion in 1997. This upward trend is expected to continue, by 2010 personal spending by debit card is expected to overtake personal spending by cash, and by 2017 it's expected to reach £469 billion.
During 2007 credit and charge cards were used to make 1.9 billion purchases in the UK to a value of £133 billion - an increase of 6% per cent on 2006 figures. This rise in credit card spending did not lead to any increase in borrowing as the amount of credit card credit outstanding fell by £1.1 billion during 2007(5).
(1) Consumer spending includes all payments made by consumers with debit cards, credit cards, cheques and automated payment methods.
(2) Automated payments include Direct Debits, Bacs Direct Credits, other phone and internet banking payments, and standing orders.
(3) Our statistics indicate that personal cheque values changed little last year; personal cheque payment volumes have however fallen by 10% over the same period.
(4) The average value of a credit card purchase in a supermarket during the first five months of 2008 was £34.33, compared with £35.57 for the same period of 2007.
(5) Bank of England figures