UK debit card spending reached record high in July

Debit card spending in the UK reached a record high of £59.1bn during July this year, data published by UK Finance has revealed.

The banking body revealed this was up by 17.9% compared to the previous month and an increase of 9.4% against July 2019.

Data also showed that credit card spending in July amounted to £15bn, an increase of 15% compared to the previous month, but 24.8% below the levels recorded in July last year.

UK Finance suggested the increase in debit card spending may have been driven by retailers encouraging customers to pay by card or contactless payments where possible, as well as by consumers choosing to make purchases using their debit card over their credit card, amid the economic uncertainty of the coronavirus pandemic.

Online card spending also reached a record high of £21.8bn in July – with 41% of total card spending by value taking place online during the month – as UK Finance suggested the pandemic has accelerated an ongoing shift towards consumers shopping online.

The data also indicated that consumers have made use of the higher £45 contactless limit introduced by the banking industry earlier this year, with contactless card spending amounting to £8bn in July, a figure up 22.5% from the previous month and by 11.1% compared to last year.

UK Finance managing director of personal finance, Eric Leenders, commented: “This data suggests the pandemic has accelerated the shift towards internet shopping, with card spending online reaching a record high in July.

“We are also seeing a marked increase in debit card spending, driven by the growing use of contactless as shoppers take advantage of the new £45 payment limit to make higher value transactions. Credit card spending has recovered slightly but continues to be impacted by ongoing economic uncertainty and fewer opportunities to spend on high value items such as holidays.

“The banking and finance industry’s clear plan continues to support customers during this difficult time, as we work closely with the government and regulators to ensure people can pay in a way that suits them.”

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