End of the credit card boom

BRITAIN'S credit card boom appears to be coming to an end, according to figures published by the Credit Card Research Group. Its study has found that growth in credit card spending rose by only 5.2% last year to £8.8bn, the smallest expansion since 1994. A further £9.8bn was spent on debit cards, up 11.9%.

'The slowdown in growth in credit card spending is a clear sign that consumers have heeded warnings of over-extension and are using their credit facilities in a sensible way,' said the group's director Steve Round.

Round, whose organisation is funded by credit card issuers, said people were continuing to use cards instead of cheques and cash, particularly on the High Street, where spending with plastic was 7.3% higher year-on-year at £12.3bn. This accounted for half of all High Street spending.

'Commentators have in the past voiced concern that credit card use was growing too rapidly and that debt was spiralling out of control,' said Round. 'Card growth will continue as more and more people switch to the convenience of spending on plastic.'

But he said that because 26m people now owned at least one credit card, providers would have to offer increasingly attractive deals to hold or gain market share.