While credit card spending in the UK may be falling currently, new information shows that payday advance lending has increased.
Brits are trying to manage their debt better, according to Santander’s credit card division, with a four per cent less money being spent on credit over the past year. Large purchases are being made with cash, and consumers may be taking out short term loans from instant cash loan providers instead of racking up credit card debt, experts say.
Consumers are still using their cards for smaller purchases, says Santander, as transaction volume has gone up by one per cent even has the amount of money spent is on the decline. Bars, restaurants, and mail order companies have all shown increased purchases via credit, suggesting Brits are trying to keep their spirits high in the bleak economic landscape by treating themselves with smaller purchases.
Petrol station and utility bill spending on credit cards had also gone up, according to the industry data. However, clothing stores, supermarkets, airlines, hotels, and travel agents all reported credit card purchasing had fallen off over the past 12 years.
Callum Gibson, spokesperson for Santander, remarked that the financial services provider’s data supports the expectation that credit card spending for non-essential items, such as clothes and holidays, would experience cut backs during times of economic austerity, and that cash spending would increase. ATM network LINK also reported last month that cash withdrawals increased by 11 per cent early in December in comparison to 2010 figures, indicating more consumers paid cash in the run-up to Christmas than they did last year.