Contactless helps debit card spending figures

Posted by Kelly Luff in Personal Finance on 18 January 2017 - Kelly is a Marketing Executive at checkmyfile

Contactless payment looked as though, for a while, it could be something of a damp squib. While the banks and credit card providers appeared convinced that we’d all be going contactless, for a long time it seemed to be rarely used outside of London, where people were more used to using it for transport.

But with the maximum payment increased from £20 to £30, it now appears that contactless is impacting on our debit card use, with debit card spending growth double that of credit cards (4.6% compared to 2.3%).

With us now able to flash our card for anything from a pint of milk to half a tank of petrol, debit cards continue to take over from us getting cash out for casual purchases. Figures from The UK Cards Association show that spending is up on cards overall, taking into account both debit and credit cards – in November 2016 they rose to total £56bn, up 3.9% year on year.

£13.2bn of this was spent online, as retailers saw both Black Friday and Cyber Monday pay off, and it was the most spent online since records of online spending started 3 years ago.

”November saw the strongest monthly growth in card spending in four months, with debit cards accounting for most of the increase at the start of the Christmas shopping season," said Richard Koch of The UK Cards Association. "The record spend online highlights the importance of card payments in internet retail, and the wider economy too."

The concern for debt charities is, however, that whilst debit card spending is usually associated to money that we already have within our banks, credit card spending generally will nod towards building up debt that those spending are perhaps unable to facilitate through their own funds. It is therefore always advisable to monitor your credit card spending, to ensure that you are not overstretching your finances unnecessarily.

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