Debit cards have overtaken cash to become the UK’s most popular payment method for the first time, figures show.
On August 30 the amount of money people had spent on debit cards since the beginning of the year overtook the value of transactions paid for in cash for the first time at £272 billion, compared with £269 billion for cash, according to the Payments Council.
The value of purchases made using debit cards rose by 10% during the third quarter of the year, compared with a year earlier, to £73.1 billion, with an additional 1.6 million transactions carried out every day.
People also used their debit cards three times more often than they used their credit cards, with 1.7 billion debit card transactions carried out during the three months, compared with just 500 million credit and charge card ones.
The group said credit card spending had increased by only 5% since 2005, while in real terms it had actually declined by a 10th.
The fall in the popularity of credit cards was also illustrated by a 14% fall in the number of credit cards in issue during the past five years to 60.7 million, while the number of individual cardholders has dropped from 31.7 million to 30 million.
There was also a 1.5% fall in cash withdrawals made during the third quarter, compared with the same period of 2009 – a decline of nearly 5% once inflation is factored in – as consumers instead used their debit cards.
Sandra Quinn, director of communications at the Payments Council, said: “Cash is too cumbersome for many consumers these days – they prefer a card for anything more than the smallest transactions.
“We now expect our debit cards to be accepted everywhere we go – in pubs and clubs, at the corner shop, online and on the high street. Having quickly supplanted cheques, then claimed the scalp of credit cards, they have now usurped cash’s throne too.”
The use of cheques continued to decline rapidly, with 104 million fewer cheques written during the past year. The group said if the current pace of decline continued, the number of cheques written each year would have halved by 2015.