The debit card is king
It has been revealed that debit cards are the preferred method of payment amongst the vast majority of the UK with substantial numbers looking to reduce their credit card debt and spend within their means. It was revealed that debit card retail sales grew by 6.8% in 2008 to a substantial £116.1 billion, accounting for more than two thirds of acquisitions using "plastic".
Over the same period credit card spending fell by 0.6% to £60.7 billion, cash transactions increased by 2.4% to £86.3 billion and cheque payments fell by a further 4.1% to £7.1 billion as the traditional cheque-book continues to be phased out. The move towards debit cards is a significant issue for many in the UK as they are only allowed to spend what they have in their account. Thankfully credit card spending has peaked, at least for the time being, although many people are still struggling to pay off what they already owe. It will be interesting to see if this trend towards debit cards continues as and when the UK recession ends and the economy starts to pick up again.
Hopefully many people stung by their credit card balances, and their current inability to make any real headway in repayments, will see credit card transactions continue to fall although many believe this may only be a short term reduction.
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