A decade of cards - UK’s plastic comes of age

Major changes in British attitudes to spending and borrowing over the past decade have altered the way we use our credit and debit cards, according to a new report from The UK Cards Association. The 2000s turned out to be a decade of two halves. Whilst the first half was characterised by strong growth across all forms of plastic, from 2005 there was a sharp retrenchment in Britons’ appetite for credit cards, long before the advent of the credit crunch.

During the first half (2000 to 2005) 22.8 million new credit cards were issued, increasing the number from 47 million cards in 2000 to 70 million in 2005. Consumer appetite for unsecured credit was strong and fierce competition between credit card companies led to attractive deals. In turn, the amount of debt outstanding on credit cards almost doubled to £68 billion in 2005, whilst credit card spending grew by 50% and debit card spending 125%.

By the end of the decade the number of credit cards had fallen to 55.6 million and outstanding balances were £10 billion lower. In 2009, the year of sharpest retrenchment, almost one in eight (7.8 million) credit cards left our wallets. The second half of the decade was instead dominated by the debit card alone whilst the credit card market stalled. Consumers’ spending on debit cards almost doubled again from 2005 to 2010, fuelled by a migration from cash and increasing use of debit cards for smaller value transactions. In contrast, credit card spending didn’t even keep pace with inflation.

The number of credit and charge cards in circulation peaked in 2005 by when more than two thirds of...Read more on this story here ---> CCR Magazine - 

A decade of cards - UK’s plastic comes of age