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Card Expenditure Statistics April 2014

12 June 2014

Spending growth on debit and credit cards hits record three year high

Consumers increasingly using cards, over cash to make smaller purchases

To access the March 2014 card expenditure statistics and the detailed sector breakdown please click here.

The latest figures from The UK Cards Association has shown that spending on debit and credit cards grew by 7.5 per cent in April 2014 – a record three year high – to £46.7bn.

These strong growth rates come amidst a change in the way consumers are using their cards, as cardholders tend to spend less per transaction, but use their card much more frequently.

This distinct trend can be observed as the ‘average transaction value’ continues to fall – moving from £49.01 a year ago, down to £47.88 in April this year. The tendency to use cards more often for smaller purchases has been driven by an increasing preference for plastic over cash, alongside increased use of contactless cards, and a rise in online shopping, which tends to be for lower value purchases.

Richard Koch, Head of Policy at The UK Cards Association, said:

“It is interesting to see that as the average amount people spend in each transaction goes down, there is an increasing preference for cards over cash. A major driver of this trend is the increased use of contactless cards – for example, people buying their lunch or a small bag of groceries – and feedback from cardholders shows they value the speed and convenience of this method of payment. This displacement of cash is only likely to continue as contactless cards are rolled out on public transport networks such as Transport for London, and more widely across the UK in the coming years.”

Elsewhere, debit card spending grew by 8.4 per cent (now £33bn), compared to 5.4 per cent on credit cards (now £13.8bn) – these figures represent a widening gap between the two, as consumers choose to rely less on paying with borrowed money.

Spending by sector

The key movements to note are:

  • Entertainment continues to be a strong contributor to card expenditure growth after increasing by £25 million to £3.7bn in April.
  • There was a significant rise in financial sector spending which rose by £52 million to £5.2bn driven by spending at security brokers and dealers, as ISA purchases were made before the close of the financial year.
  • Card spending on automotive fuels is now at a record high, amounting to 91 per cent of all spending in this sub-sector.

-Ends-

For further information please contact The UK Cards Association Press Office on 020 3217 8436 or email press@ukcards.org.uk

Notes to Editors:

  1. The full April 2014 Card Expenditure Statistics, include detailed retail and service sector data, are available here. Total spending figures are seasonally adjusted.
  2. Detailed-sector level spending figures have not been seasonally adjusted.
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