Credit card spending increases by 1%

Latest data from UK Finance has shown that there were 381.4 million credit card transactions in November, 1 per cent more than in November 2023. The total spend of £20.8 billion was 0.2 per cent higher than November 2023.

Outstanding balances on credit card accounts have grown by 5.2 per cent over the twelve months to November and 48.7 per cent of outstanding balances incurred interest compared to 49.5 per cent in November 2023.

There were 2.18 billion debit and credit card transactions in the UK in November, 2.5 per cent more than in November 2023. The total spend of £73.5 billion was 0.2 per cent lower than November 2023.

Contactless payments accounted for 64 per cent of all credit card and 76 per cent of all debit card transactions. There were 1.60 billion contactless card transactions in November, 3.6 per cent more than the 1.55 billion in November 2023. The total value of contactless transactions was £25.7 billion in November, a 5.3 per cent increase on £24.4 billion in November 2023.

The number of contactless credit card transactions was 7.9 per cent higher than November 2023. The number of contactless debit card transactions was 2.9 per cent higher than November 2023.

The data showed that there  were 2.3 billion debit card transactions in November, 1.6 per cent more than in November 2023. The total spend of £66.2 billion was 0.6 per cent lower than November 2023.

Commenting on the data,James O’Donnell, Director of Research & Consulting at TransUnion said “Early signs of consumer relief emerged in the latest UK Finance card spending report, but the cumulative pressures on consumer finances remain high. While total credit card spending rose by 0.2% year-on-year, outstanding balances continued their upward trajectory, increasing by 5.2% over the same period. Meanwhile, despite a modest rise in transactions, debit card spend fell slightly (0.6%) in November, which is notable given Black Friday sales fall within this period.

“In terms of the good news and signs of consumer relief, consumers are continuing to make headway in reducing their monthly incurred interest on credit card debt. The percentage of balances that incur interest are down nearly a full percentage point since last year at 48.7% down from 49.5%. However, the picture is less positive in terms of reliance on credit. The continued divergence between debit and credit spend growth suggests that consumers are increasingly turning to borrowing to manage everyday expenses, even as inflationary pressures show signs of easing.”