A report on credit card spending for 2005 from the Association of Payment Clearing Services (APACS) has revealed a shift in cardholder behaviour - spending on credit cards is levelling off whilst credit cardholders concentrate on making repayments.

The figures reveal the amount spent on credit cards in the UK increased from £122.8 billion in 2004 to £124.1 billion in 2005, an increase of just 1%. The number of card transactions has fallen by 1% to a total of 2.1 billion.

The number of card users who repaid their credit card in full each month rose from 56% to 59%. Bank of England figures reveal that 95.3% of all spending in 2005 was repaid in full - meaning that credit card repayments have overtaken spending for the first time.

Sandra Quinn, director of communications at APACS says:
“Our figures show that UK credit cardholders are reining in their spending and concentrating on repayments - a trend which has continued throughout this year. In fact the latest figures released by the Bank of England in August 2006 show credit card repayments overtaking spending for the first time.

“Nervousness about economic growth could well have contributed to the reduction in credit card spending and higher repayments, alongside media speculation about whether consumers are borrowing responsibly.”

While we may be using credit cards more responsibly, our love of plastic has certainly not diminished as the debit card has become even more popular. Figures show that in 2005 debit card spending in shops overtook cash spending for the first time. The number of personal debit cardholders increased by three per cent to reach 40.8 million.

The massive growth of the Internet is also documented in the APACS report as figures reveal consumers spend five times more on their plastic cards through the internet than they did just five years ago. This figure is rising and by 2015 internet purchases are projected to account for over 20% of personal credit card payments within the UK.

Article added: 12/10/06