UK card activity falls as shoppers remain cautious

Credit and debit card activity fell in June despite the re-opening of shops, pointing to continued caution among shoppers following the Coronavirus lockdown.

The latest data from UK Finance showed that card activity remained below pre-lockdown levels in June, dropping 43.1 per cent compared to June 2019, with 933 million transactions made across the month. The levels of activity were also down 2.7 per cent compared to May.

The figures also showed that consumers continued their increased use of online retailers, with online card spending accounting for 22 per cent of volumes and 42 per cent of transaction value for the month, compared to 14 per cent and 30 per cent respectively a year earlier.

June also saw the UK’s annual growth rate of outstanding balances on credit cards continue to decline, dropping by 13.4 per cent year-on-year, suggesting customers used the lockdown as an opportunity to pay down credit card bills.

Amid less frequent spending and maintained repayment levels, the total value of credit card transactions rose in June, increasing 22.9 per cent compared to the previous month, to £12.2 billion.

The trend towards increased usage of contactless cards also continued, with consumers and retailers making use of the higher £45 contactless limit. In June, 55.6 per cent of all payments in the UK were contactless, compared to 42 per cent the year before.

Contactless payments totalled £6.5 billion, a 15.5 per cent increase on May, and followed a record month in March, when 56.6 per cent of all payments were contactless.

Eric Leenders, managing director of personal finance at UK Finance, said: “While card activity is still significantly below pre-lockdown levels, there has been steady growth in the value of purchases using payment cards in recent months.

"Despite non-essential shops re-opening in England in mid-June, there was actually a drop in the number of card transactions in the UK compared to the previous month.”

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