Increase in consumer cash use

Posted 2007-12-13

The ongoing situation in the credit card sector is convincing consumers to withhold their plastic in favour of funding their holiday purchases with cash instead. 

According to figures released yesterday by cash machine network operator LINK, daily ATM withdrawals for the first ten days of December are up by 7.1% over the last month - previous years’ figures have been closer to 5%. 

This trend goes against predictions made last month by payments association APACS. The company predicted an increase of £53 billion or 4% in total festive retail spending over last year’s figures, which it claimed would be driven by increased card spending, accompanied by a 5% fall in cash spending - dropping from £19.8 billion in 2006 to £18.9 billion in 2007.   

The drop in credit card spending appears to be confirmed by overall retail spending figures released yesterday. Credit card giant MasterCard says shops recorded weak sales for November, causing a decline in the annual retail sales growth rate from 4.5% to 4%.

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