Credit card spending increases by 8.6%

Latest data from UK Finance has shown that 48.% of credit card balances incurred interest in March 2026 compared to 48.6 per cent in March 2025.

Credit card transactions increased year-on-year by 8.6%, and the total spend rose to £23.8 billion. There were 419 million credit card transactions in March, 8.6 per cent more than in March 2025. The total spend of £23.8 billion was 8.2 per cent higher than March 2025.

There were 2.3 billion debit card transactions in March, 1.1 per cent more than in March 2025. The total spend of £68.7 billion was 1.1 per cent higher than in March 2025.

There were 2.14 billion debit and credit card transactions in the UK in March, 3.5 per cent fewer than in March 2025. The total spend of £74.6 billion was 2 per cent lower than March 2025.

Contactless payments accounted for 66 per cent of all credit card and 75 per cent of all debit card transactions. There were 1.573 billion contactless card transactions in March, 4.5 per fewer than the 1.646 billion in March 2025. The total value of contactless transactions was £25.9 billion in March, a 0.8 per cent decrease on £26.1 billion in March 2025.

The number of contactless credit card transactions was 4.1 per cent higher than March 2025. The number of contactless debit card transactions was 6 per cent lower than March 2025.

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said “The rise in both credit card transactions and the amount spent is a stark reminder that they are a useful fall back for consumers struggling with the cost of living. The first few months of any year typically come with a debt hangover. However, credit card debt should be paid off quickly, or moved to an interest-free balance transfer card, yet UK Finance show almost half (48%) are incurring interest. Thankfully, there is a variety of lengthy interest-free balance transfer cards to choose from, with TSB leading the market with a 38-month term, which charges a transfer fee of 3.49%.

“As the Moneyfacts average credit card purchase rate stands at a record high of 36.0% APR, even small balances can take ages to repay if someone is only paying off the bare minimum. It is much more sensible for spenders to set up a higher fixed repayment; a debt of £300 would take a whole year and eight months to pay off based on a fixed repayment of £20, and it would cost around £85 in interest. Increasing this payment to £50 per month would clear the debt in seven months, and more than halve the interest charged (£30).

“Contactless payments continue to dominate when using a debit or credit card, it saves time, however, the rise of mobile wallets could see the use of plastic dip further moving forward. Whichever way is preferred, it is essential consumers keep tabs on their everyday spending, which they can do easily by turning on notifications on their mobile app.

“Credit cards, whether physical or in a digital form, will continue to be of benefit to consumers, particularly for their protection for those who may be ripped off, as any goods or services not received which are valued over £100 up to £30,000 are covered under section 75 of the Consumer Credit Act.”