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Consumers’ spending using credit cards and debit cards fell down sharply in September, according to Mastercard. The total amount spent using Mastercard’s branded credit and debit cards fell 3.5% to £5.41bn during the month. The cautiousness comes in the wake of rising petrol prices which lead to increased fuel bills.
The restaurant and recreation sectors were the worst hit. Their spending fell by 9.9% and 3.9% respectively. Mastercard's findings will endorse recent reports that spending in UK High Street has fallen. Martescard’s branded credit and debit cards account for just over a third of the total number of cards being used in the UK. Spending on debit cards fell radically by 6.3 per cent to 1.4 billion.
The Bank of England (BoE) had reported that credit card borrowing fell by 146 million pounds in August. This was a consequence of borrowers paying off their debts. The Office for National Statistics (ONS) has stated that though the consumer demand was weak in August, it remained stable.
“The Bank of England cut interest rates in August in an attempt to reinvigorate High Street spending, but despite last weeks decision to keep rates on hold, another cut may be necessary to boost growth,” feels Brian Moore, Senior vice-president of Mastercard’s Europe division.
Retailers whose sales have taken a beating because of less spending using credit and debit cards include Next, Bhs, Kingfisher among others.
However, it has been noted that online traders have reported an increase in their total value of transactions. Usage of credit and debit cards meant that they rose by 1.62 per cent to almost 1.36 billion sterling.
“The British public's widely acclaimed ability to spot a bargain may also be fuelling the current overall growth in online shopping,” added Moore.
Posted
on : Thu, 13 Oct 2005 16:25 GMT | Credit Cards News
By : Salim Patel
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