Christmas credit card spending at record high

British consumers put more money on plastic this Christmas than ever before, new industry figures have revealed.

According to the Association for Payment Clearing Services (Apacs), which oversees all card transactions, UK credit and debit card spending in December totalled £28.5 billion, an 11 per cent increase on the same month in 2004.

The figures suggest that while consumer spending remained relatively subdued last Christmas, shoppers are putting more of their purchases on credit and debit cards, with card spending accounting for 61.4 per cent of all spending in December, up two per cent on 2004.

The survey also shows an increasing switch from credit to debit cards, with 67 per cent of all card purchases over the month made on debit cards.

Nevertheless, with total credit card spending increasing by 0.9 per cent year-on-year, Apacs director of communications, Sandra Quinn believes that both credit and debit card spending will continue to rise in 2006.

‘We spent a record amount this December on our plastic cards, and we are seeing an ongoing trend of paying by debit rather than credit cards – perhaps reflecting that we’ve become a nation who want to keep a tighter rein on our finances,’ Ms Quinn said.

‘This said, the fact remains that credit card spending continues to rise and so do repayments.

‘And this can only be because we like credit cards, and enjoy the flexibility and benefits they provide – especially where they give added protection and the flexibility to spread the load over time when buying high value items.’

However, she warned credit card users to ensure they plan their repayments carefully to avoid paying excessive interest or incurring fines for late payments.

‘Anyone who borrowed money over Christmas if they haven’t done so already should sit down and work out exactly how they plan to repay,’ she said.

A recent Datamonitor study revealed that Britons’ love affair with plastic has seen the UK top the European personal debt league table.

According to the market analyst’s report, the average Briton has outstanding personal debts totalling £3,034. This is more than a third higher than the second-most indebted nation in Europe, Germany, where average debts total £2,037.

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