Credit Card Spending Continues to Increase as Consumers Face Economic Pressures

James O’Donnell, director of research & consulting at TransUnion in the UK, comments on the recent UK Finance Card Spending report: 

“The UK Finance card spending report for March 2024 shows a continued increase in consumer credit card usage amidst ongoing economic pressures. The report revealed an 0.8% rise in total credit card spending year-on-year and a significant 5.9% increase in contactless transaction values. This trend suggests that consumers are increasingly relying on credit to manage their daily expenses, driven by high inflation and stagnant real wage growth. Outstanding credit card balances have also grown by 9.9% over the past year, with 4.98% of these balances accruing interest, a slight 0.5% decrease from the previous year, highlighting a continued potential financial strain on consumers. 

"We’re also observing a continued shift of spend preference from debit card to credit card. The movement is small, but reflects the increasing consumer need to rely on credit for regular spending. 

"The continued squeeze on living costs means responsible credit management is key, as TransUnion’s latest consumer pulse study showed that 45% of UK adults feel their household income isn’t keeping pace with inflation. As such, financial institutions must provide the tools and resources to support informed borrowing decisions. TransUnion remains committed to assisting lenders in creating a comprehensive financial picture via access to the most up-to-date affordability information available, fostering responsible borrowing practices, and promoting consumer wellbeing during these challenging times.”