
Latest data from UK Finance has shown that credit card spending has continued to increase as consumers face economic pressures.
The report revealed an 0.8% rise in total credit card spending year-on-year and a 5.9% increase in contactless transaction values.
James O’Donnell, Director of Research & Consulting at TransUnion said “The UK Finance card spending report for March 2024 shows a continued increase in consumer credit card usage amidst ongoing economic pressures. The report revealed an 0.8% rise in total credit card spending year-on-year and a significant 5.9% increase in contactless transaction values. This trend suggests that consumers are increasingly relying on credit to manage their daily expenses, driven by high inflation and stagnant real wage growth. Outstanding credit card balances have also grown by 9.9% over the past year, with 4.98% of these balances accruing interest, a slight 0.5% decrease from the previous year, highlighting a continued potential financial strain on consumers.
“We’re also observing a continued shift of spending preference from debit card to credit card. The movement is small but reflects the increasing consumer need to rely on credit for regular spending.
“The continued squeeze on living costs means responsible credit management is key, as TransUnion’s latest consumer pulse study showed that 45% of UK adults feel their household income isn’t keeping pace with inflation. As such, financial institutions must provide the tools and resources to support informed borrowing decisions. TransUnion remains committed to assisting lenders in creating a comprehensive financial picture via access to the most up-to-date affordability information available, fostering responsible borrowing practices, and promoting consumer wellbeing during these challenging times.”
The figures also showed that the number of contactless cards in issue in the UK topped 150 million (150,172,000) for the first time in March 2024. This means that contactless cards now make up 93 per cent of the cards in issue in the UK.
The data also. showed that there were 1.59 billion contactless card transactions in March 2024, 5.9 per cent more than in March 2023. Within this total, the number of contactless debit card transactions (1.364 billion) was 5.3 per cent higher than in March 2023. The number of contactless credit card transactions (225 million) was 9.3 per cent higher than March 2023.
This means contactless payments accounted for 76 per cent of all debit card transactions and 63 per cent of all credit card transactions made during March 2024.
The total value of contactless transactions was £25.1 billion in March 2024, a 10.2 per cent increase compared to March 2023.
Total spending across all cards, including contactless, online, and chip and pin was £75.8 billion and there was a total of 2.2 billion debit and credit card transactions made in the month.
Janine Randolph, Head of Data Management at UK Finance, said “Contactless cards continue to be a very popular way of consumer spending, whether that’s using a physical card or through a mobile phone. There are over 150 million contactless cards now in issue and across these people spent over £25 billion on them in March alone.”