Report: Brits' appetite for credit has waned in recent years

By UK CreditCards.com

The way in which Britons use debit and credit cards has changed over the past 10 years, according to a new report from the UK Cards Association. The association's report details a rise and fall in the number of credit cards in circulation, as well as a peak in outstanding balances in the mid-2000s.

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Strong growth was seen during the first half of the decade, with the number of cards in circulation rising from 47m in 2000 to 70m in 2005. Meanwhile, levels of outstanding credit card debt almost doubled to £68bn and card spending grew by 50%.

A different picture emerges for the second half of the decade, when Britons' appetite for credit cards shrank.

The number of cards in circulation dropped back down to 55.6m. Outstanding balances fell by £10bn and credit card spending failed to keep up with inflation, with many consumers relying on their debit cards instead.

Melanie Johnson, chair of the UK Cards Association, revealed that debit cards are now used three times as often as credit cards, despite the similar levels of usage seen in 2000.

But she noted: "Nevertheless, people still value the flexibility and convenience that credit cards afford them, for instance to spread out the cost of a large purchase, or for the valuable additional protection they provide."

See related: Study: Worst consequences of recession 'still to come'; Number of cash-strapped Brits at all-time high

Published: 26 September 2011