Consumers to spend £53bn over Christmas period

APACS, the UK payments association, released its UK consumer spending predictions for December, which estimate that spending on cards, cash and cheques will reach £53.0 billion, an increase of 4.2 per cent on December 2006, when it was £50.8 billion.

APACS’ forecasts reflect that plastic card use is increasing, and is expected to reach £34.1billion this December, making up 64.3 per cent of the total predicted spend, up from 61.0 per cent in 2006.

Continuing recent trends these figures show that as credit card spending remains flat, debit card use continues to grow as the most popular method of plastic payment:

Overall plastic card spending looks set to rise. In December 2006 £31.0 billion was spent on plastic cards, and this year APACS predicts that to rise by 9.9 per cent to £34.1 billion.

Festive online card spending is expected to increase by 55.6 per cent this December to £5.6 billion, which is over a billion pounds a week, from £3.6 billion last year.

The trend to pay by debit card continues to beat expectations. Debit card expenditure in December is expected to reach £22.4 billion, up £2.8 billion from £19.6 billion in December 2006 (an increase of 14.3 per cent), but more impressively up £17.2 billion from £5.2 billion in December 1997 (an increase of 330 per cent).

Credit card spending in December 2007 is predicted to remain close to December 2006 levels. At £11.7 billion it is virtually unchanged from a figure of £11.4 billion for December last year. The average amount spent on credit cards each month over the past 3 years has remained flat at about £10 billion.

Cash and cheque spending is set to fall this year by 4.7 per cent to £18.9 billion, from £19.8 billion in 2006.

Sandra Quinn, director of communications at APACS, said: “Whether buying the turkey or stocking fillers, we’re most likely to be using our debit card to pay for them this Christmas, continuing the ongoing trend of pulling out the debit card in preference to our credit cards, cash or cheques. The one exception is online where we are much more likely to use our credit cards – which makes sense because of the extra consumer protection they provide.”