If used correctly, credit cards offer an easy and affordable way to spread out expenses month by month or to earn rewards on day-to-day spending. However, some people don’t like the idea of going into debt at all, and others, while having a credit card, are reluctant to use it.
We’ve taken a look at the data to see how many Brits own a credit card, how much they spend on them and whether credit cards are more common than 10 years ago.
The latest facts and figures
Number of card holders
UK residents are more likely to own a debit card than a credit card. In July 2019, there were 61.9 million credit cards issued to UK residents, and 97.3 million debit cards issued. In other words, people are 57% more likely to own a debit card. The total number of cards issued has risen from 158.9 million in 2018 to 159.2 million in 2019.
People tend to spend more time on a debit card than on a credit card, with Brits making 1.3 billion debit card transactions compared to 342 million credit card transactions in July 2019. In comparison with July 2018, credit card transaction volumes have gone up by 2.7% (+9 million) and debit card transaction volume has risen by 6.5% (+79 million).
In July 2019, the average Brit made 31 transactions, of which 25 were on a debit card and 7 were on a credit card. Both online and contactless transactions were more popular on debit cards, with the average Brit making 3 online and 12 contactless transactions on a debit card compared to 1 online and 3 contactless transactions on a credit card.
The average purchase via credit card is £54.09, 68% higher than the debit card’s average of £32.19. Contactless purchases are also higher on a credit card, with an average value of £10.27 per transaction on credit card compared to £9.26 per transaction on debit card. However, when it comes to online purchases, the average transaction is higher on a debit card (£86.37 per transaction) compared to credit cards (£54.09 per transaction).
Overall, Brits preferred spending on debit cards, with total transactions in July 2019 on debit card coming to £41.6 billion compared to £18.5 billion on credit card. Total spending on debit and credit cards is down 0.69% from July 2018, made up of a decrease of 1.3% in debit card spending and an increase of 0.72% in credit card spending. One of the biggest spending trends is more contactless transactions, which have increased by 17.97% since July 2018.
Average credit card debt
In February 2019 the total credit card debt in the UK was £72.6 billion. This equates to £2,649 credit card debt per household and £1,386 per adult. This is a £1.8 billion increase from February 2018.
Total credit card spending has been on a steady upward climb since 1993. October 2018 saw the biggest month on record with £18.45 billion spent, over six times the amount spent in October 1993, £2.92 billion. As well as this general increasing trend, each year follows a distinct pattern, having a sharp increase in credit card spending in the months leading up to Christmas, followed by a steep drop around February.
Lending and repayments (seasonally adjusted) 1997-2019
Lending and repayments closely mirrored each other’s movements up until late 2012, where lending continued to rise while repayments took a plunge. Repayment levels haven’t quite recovered and a significant gap between them and lending remains. In 2018 for example, £222 billion was lent in total via credit cards, while £160 billion was paid back.
Credit card write-offs saw a steady increase until a huge spike in 2010, reaching a peak of £2.1 billion in June. This figure has generally decreased since, with fluctuations. In Demember 2018, the total amount written off was £412 billion, a decrease of 10.2% compared to Decemember 2017.
Average interest rates on credit card loans, 1999-2019
Interest rates on credit card loans have been relatively steady in recent years. Between 1999 and 2003 they decreased consistently, going from a high of 17.97% in February 1999 to a low of 13.49% in July 2003, which is still the month with the lowest average interest rates on record. Since 2008, they’ve generally hovered around 18%. In 2018, the average interest rate was 18.47%, a very slight increase from that of year before (18.22%).
Chris Lilly is a publisher at finder.com. He's a specialist in credit-based products including business and personal loans, mortgages and credit cards, and is passionate about helping UK consumers make informed decisions about their borrowing. In his spare time Chris likes forcing his kids to exercise more.
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