UK credit and debit card spending fell in October

Spending on debit and credit cards fell in October compared to the previous month as tougher COVID-19 measures were introduced across the country, new UK Finance data has revealed.

Figures showed that a total 1.7 billion debit and credit card transactions were carried out in the UK during October – a 0.4% decline from September, as well as a 3.6% drop from October 2019.

These transactions amounted to a total spend of £64.2bn, which was 2.5% less than the previous month, but 4.9% higher than the figure recorded for October a year earlier.

UK Finance said the proportion of spending made using contactless cards also fell, as coronavirus restrictions provided fewer opportunities for people to spend money on the high street.

The data showed that 41% of card transactions were contactless in October, compared to 44% the same month the previous year. There was also a total of 687 million contactless card transactions in October, which was 1.9% lower than in September, and 9.8% lower than October 2019.

Furthermore, the banking body’s figures showed that outstanding balances on credit card accounts fell by 14.7% in the year to October 2020. This was the eighth successive month in which repayments outstripped borrowing, and the largest drop over a 12-month period since the pandemic began.

UK Finance managing director of personal finance, Eric Leenders, commented: “October saw card spending decline in the UK as additional social distancing measures and COVID-19 restrictions were put in place across the country, reducing opportunities to spend on the high street and in pubs, bars and restaurants.

“Spending on contactless cards also fell as regional lockdowns came into force, restricting use of contactless across retail outlets. However, contactless remained popular for essential transactions, with consumers being able to make use of the increased £45 payment limit.

“Outstanding balances on credit card accounts fell for the eighth month in a row, reaching the largest drop over a 12-month period since the pandemic began – indicating that more people were paying off debt, or fewer making use of credit.”

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