In the UK, cash has ceased to be the king as debit card usage has overtaken cash spending for the first time. Cardholders made 1.6 million more transactions a day this summer as against their transactions in the third quarter of 2009.
Britons spent £272 billion on their debit cards, compared with £269 billion of cash transactions, in the 12 months to the end of September, the Payments Council has revealed.
Credit card spends have however remained relatively flat. In the third quarter, outstanding credit card balances dropped to their lowest level since 2003, with consumers continuing to pay down debts.
Around 61 per cent of credit cardholders pay off their bills in full each month. The number of cards in issue has also fallen to 60.7 million - ten million fewer than in 2005.
The council said, conscious of the need to repay borrowed credit, consumers were increasingly choosing to use their debit card. Further the possibility of greater financial stress in the recession and beyond had not driven them to rely more on credit, which was contrary to expectation.
The value or debit card purchases was up 10 per cent in the third quarter of the year, as against a year earlier, at £73.1 billion. Also an additional 1.6 million transactions were being carried out every day.