If used correctly, credit cards make an easy and affordable way to spread out expenses month by month. 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. So how many Brits own a credit card? How much do they spend on it? Are credit cards more common than 10 years ago?
We’ve taken a look at the data. This report was put together using the UK Finance Card Spending publication, along with data released by the Bank of England in March 2019.
UK residents are more likely to own a debit card than a credit card. By January 2019, there were 60.1 million credit cards issued to UK residents, and 98.6 million debit cards issued. In other words, people are 64% more likely to own a debit card. The total number of cards issued has risen from 157.6 million in 2018 to 158.7 million in 2019, with 144,000 debit cards and 951,000 credit cards being issued.
Credit card and debit card transactions
Volume of transactions
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 337 million credit card transactions in January 2019. In comparison with January 2018, credit card transaction volumes have gone up by 7.3% (+23 million) and debit card transaction volume has risen by 13.5% (+153 million).
In January 2019, the average Brit made 31 transactions, of which 25 were on a debit card and 6 were on a credit card. Both online and contactless transactions were more popular on debit cards, with the average Brit making 3 online and 10 contactless transactions on a debit card compared to 2 online and 2 contactless transactions on a credit card.
The average purchase via credit card is £54.98, 67% higher than the debit card’s average of £33. Contactless purchases are also higher on a credit card, with an average value of £9.86 per transaction on credit card compared to £9.08 per transaction on debit card. However, when it comes to online purchases, the average transaction is higher on a debit card (£83.61 per transaction) compared to credit cards (£66.02 per transaction).
Overall, Brits preferred spending on debit cards, with total transactions in January 2019 on debit card coming to £42.3 billion compared to £18.5 billion on credit card. Total spending on debit and credit cards is up 4.61% from January 2018, made up of an increase of 3.35% in debit card spending and an increase of 7.61% in credit card spending. One of the biggest spending trends is more contactless transactions, which have increased by 18.09% since January 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.
Credit card trends 1993-2019
Monthly credit card spending 1993-2019
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 each quarter, 1993-2018
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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