Apacs: Card repayments rising

October 12, 2006

Apacs, the UK payments association, has said that credit card holders are starting to concentrate on repaying their debts as spending on cards is beginning to level off.

While the amount spent on cards is up by one per cent from £122.8 billion in 2004 to £124.1 billion this year, the number of transactions has fallen by one per cent to 2.1 billion.

According to Bank of England figures, the proportion of repayments is currently at 95.3 per cent – the highest level since 1998.

The amount that customers are repaying also appears to be increasing, as the ratio of people who repay their credit card in full each month has increased from 56 per cent in 2004 to 59 per cent this year.

Sandra Quinn, director of communications at Apacs, said: "Our figures show that UK credit card holders are reining in their spending and concentrating on repayments – a trend which has continued throughout this year.

"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."

The use of debit cards has continued to be the most popular form of plastic payment this year and has exceeded cash in popularity for the first time ever. Of the total £240 billion spent in 2006, 37 per cent has been on debit cards and 34 per cent in cash.