Source: UK Cards Association
The number of credit and debit card transactions grew at the fastest rate in almost a decade in May, according to the latest figures from the UK Cards Association.
Debit and credit cards were used to make 990 million transactions in May, an increase of 9.1% compared to the same month last year, and up from 981million in April. The increase is the highest rate since January 2005.
The growth in the volume of purchase is outstripping the value of card spending, which grew by 7.5% in May, continuing the recent trend in consumers increasingly using their cards for smaller value purchases.
Richard Koch, Head of Policy at The UK Cards Association, said:
"With over 350 card transaction now made every second in the UK, consumers are increasingly choosing cards over cash. Behind the figures, we're seeing a change in consumer behaviour with people opting to buy less but more often, trading down or switching to budget retailers. At the same time, consumers are using their contactless cards for smaller payments too."
Combined spending on debit and credit cards was in £47.1bn in May. Monthly debit card spending (£33.3bn in May) continues to grow faster than credit card spending (£13.8bn) - both up by 8.5% and 5.3% respectively.
A factor boosting credit card growth has been consumers looking to benefit from rewards such as cashback and loyalty points, before then paying off outstanding balances in full before the end of the interest free period.
The key movements to note are:
• Spending on clothing was up 5.9% year on year to £2.2bn in May, driving growth in the retail sector. Warmer weather and two bank holiday weekends were the likely prompt for consumers to change their wardrobes, and take advantage of sales.
• Restaurant spending was a major factor behind a £32m increase in entertainment sales, to £3.7bn in May.
• Debit and credit card spending made up 75.2% of total retail sales during the month, with a split of 51.7% by debit and 23.5% by credit.