Money Magic

It appears that fewer consumers are using credit cards to pay for their Christmas purchases this year, relying instead on cash. 

According to figures released yesterday by LINK, operator of the cash machine network in the UK, daily ATM withdrawals increased 7.1 percent for the first ten days of December over the same period in November.  Over the past four years, the rate of increase has hovered around 5 percent. 

In a report released last month, APACS, the trade association which represents the UK payments industry, speculated that cash spending during the holiday buying season would decline from £19.8 billion in 2006 to £18.9 billion this year, a drop of 5 percent.

APACS forecast an increase in seasonal spending of 4 percent over last year’s figures, to £53 billion.  The agency expected the additional spending to be supported by credit card expenditures. 

In response to concerns surrounding the current credit crunch, however, consumers appear to be putting their credit cards away and making their purchases with cash.

Yesterday’s overall retail spending figures add substance to this premise.  The annual retail sales growth sales slowed from 4 percent to 4.5 percent, fueled in part by weak sales in shops in November, according to credit card giant MasterCard.

This entry was posted on Thursday, December 13th, 2007 at 4:32 pm and is filed under Credit Cards. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.