'White goods' slump leads to credit card decline

27/10/2008

The economic downturn will mean that more consumers use debit cards instead of credit cards over the next few months - a report has claimed.

Datamonitor, which released the new research, said that the value of credit card purchases will fall by 1.1 per cent to £120 billion across 2008.

Correspondingly, debit card use will rise 14 per cent to hit £438 billion.

One of the reasons for this trend is the tailing-off of demand for "white goods" - electronic gadgets and other high-cost consumer purchases.

Andrew Fabricius, author of the Datamonitor report, commented: "The fall in the value of credit card transactions reflects the fact that consumers are less confident about spending on credit and also are spending less on large items, such as white goods."

He added: "Particularly with less people moving home, there has been less demand for goods such as household appliances and furnishings, which typically might be purchased with a credit card."

Latest figures from the government found that the economy shrank by 0.5 per cent over the three months to December.

Tags; Debt Management and Banking, Credit Card Lifestyle,

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