Annual domestic card spending by UK consumers crossed £500bn mark for the first ever time in 2013 as shoppers increasingly choose cards over cash, according to a report published by The UK Cards Association.
The report says that debit and credit cards accounted for three in every four pounds spent in shops, up from two in every four just a decade ago.
According to the figures published by trade body, Britons spent £520bn on UK goods and services using their debit and credit cards last year, a 6.7% rise compared to the £488bn spent over 2012. Card spending has more than doubled over the last decade, up from £244bn in 2003.
Three-quarters (74.5%) of all retail spending is now made using debit and credit cards – up from less than half (46.5%) in 2003 – highlighting a clear shift in consumer behavior in the past decade.
Including spending by overseas visitors, the total value of purchases on debit and credit cards in 2013 was £534bn, meaning that spending on cards now constitutes a third (33%) of the UK’s total GDP £1.61trn in 2013.
This quantity has increased from under a quarter (22%) just a decade ago in 2003 when total card spend was £257bn and GDP was £1.14trn, according to the report.
The UK Cards Association chair Melanie Johnson said, "With three in every four pounds spent in British shops now paid with cards, these figures reveal a huge shift over the last decade in the way we chose to transact."
"Rather than carrying cash, consumers are increasingly opting for their cards instead, not least because of the extra protections available.
"The rise in online shopping, coupled with increasing momentum behind contactless cards, will likely see this trend in consumer behaviour continue," Johnson added.
The report reveals there are a total of 175.6 million cards in issue in the UK, including 95.7 million debit cards (up 5.1% since 2012); 55.4 million credit cards (down 1.9%); 18.2 million ATM-only cards (up 5.0%); and 6.3 million charge cards (down 4.8%).
The UK Card Payments 2014 report underlines that younger consumers are more likely to hold and use debit cards, while older and wealthier consumers are more likely to use credit cards.
Furthermore, approximately 6 in 10 of all UK adults have a credit or charge card – a total of 30.1 million cardholders.