Source: Marks & Spencer
Research from M&S Bank has revealed that one in four (24%) Brits now uses a debit card more frequently than they did a year ago, with four in 10 shoppers preferring to use a debit card rather than carrying cash. This compares to a 14 per cent increase in credit card use over the last 12 months.
The use of debit cards has increased most in the 18-35 age group (33%), closely followed by those aged 35 -54 (27%), compared to 18% of those aged 55+.
Brits are becoming savvier with their spending, with over half (51%) admitting that loyalty points influence how and where they shop. M&S Bank found that over six in 10 consumers (66%) use some type of reward card, with more than two thirds (69%) regularly redeeming their points; increasing to over 90 per cent for M&S Bank customers.
Colin Kersley, CEO of M&S Bank, said: "Although our research shows that many shoppers are using reward credit cards, debit card spending totalled £348bn in 2012*, more than double that spent on credit cards, so it's perhaps not surprising that more than one in five of us would switch providers to earn rewards on debit card spend."
The rise in debit card spending is also partly down to the fact that consumers are keen to budget more, with 43 per cent of those who have increased their debit card use doing so because they want to better track their spending.
Looking at credit card usage, the M&S Bank research shows that credit cards are currently the preferred method of payment for more expensive items, such as holidays (62%), clothes (46%) and even petrol (47%). Credit cards are also used for purchasing treats, with over a third (35%) preferring this method of payment for beauty products and treatments, while 27 per cent use a credit card for everyday items such as lunches or takeaway coffee, suggesting they're maximising their rewards.
Of those who have increased their credit card usage, or taken out a new card (9%), in the last 12 months', most have done so to get cash back or rewards, with 36 per cent citing this as one of the main reasons. This rises to almost half (45%) among 35-54 year olds.
In contrast, 28 per cent of all card holders said the key reason for choosing their main credit card is because they also bank with the same provider, but 21 per cent of all crecredit card holders would switch if it meant earning more rewards on their spending.
Colin Kersley added: "We now live in a 'rewards culture' where consumers expect to benefit from their loyalty, and rightly so.
"With the majority of UK purchases being made by card, people can earn a significant amount in reward points so it's really worth spending a little time to research the card that suits your needs. Reward points are a great way to save for a special treat, event, or even just to help reduce everyday costs."