Recent figures have shown that British shoppers are switching to cash or debit cards to pay for goods and are abandoning credit cards in an attempt to avoid building up debt.
The statistics are courtesy of the British Retail Consortium, which includes nine out of ten of shops and they have reported that purchases paid for with credit cards slumped by 12.9% while debit card use climbed by 15.8%. The total number of cash transactions also fell but the total value of each purchase went up by 13% to make an average of £12.93.
The declining use of credit cards is a win-win scenario – well for everyone but the credit card firms. Retailers are not fans of credit cards as they are the most expensive kind of transaction to process, with each purchase costing the retailer 37.1p. This is peanuts compared to some of the additional charges which customers have paid over the years on items such as cinema tickets and airline seats, but some retailers charge customers no extra for paying via credit card. A debit card transaction costs the retailer on average 9.2p whilst taking payment in cash will mean transportation and banking charges of just 1.7p. Overall, despite credit cards only making up 10% of transactions, they ate away a disproportionate 44% of costs charged to retailers for processing.
Avoiding accumulating debts is not the only benefit customers will feel from avoiding the use of credit cards. Any transaction paid for with a credit card will take an average of 39.4 seconds compared to a far speedier cash payment, which takes just 27.2 seconds.
The director of the BRC said the public were sending out a clear message that they would not be spending money they did not possess and described the trend as ‘cash remains king.’