Fighting debt with debit cards

30 October 2008

The total value of credit card transactions this year is expected to drop 1.1% from 2007 levels, says market analyst Datamonitor.

Overall spending on plastic (debit, credit and charge cards) is actually expected to increase by 11%, rising from £536 billion in 2007 to £594 billion in 2008. According to Datamonitor, the increase is expected ‘as consumers switch to using cards from other payment types such as cash and cheque’.

However, a greater proportion of that money will be spent using debit cards, with consumers moving away from credit cards ‘in a bid to keep their debt down’, as WalesOnline.co.uk puts it.

Nearly 75% of all card purchases this year are expected to be made using debit cards, with credit card transactions accounting for just 20%.

“Debit cards certainly have a role to play in helping consumers manage their debt,” said a spokesperson for debt management company Gregory Pennington. “They don’t actually involve borrowing money, so they can make it much easier for people to avoid spending more than they can afford.”

“It’s good to see people taking steps to manage their debt in ways such as this. Some people, however, may require professional help with their debts. A debt management plan, for example, can help them reduce their monthly payments to their unsecured debts – and get themselves out of debt at a rate they can afford.”

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Gregory Pennington offer debt management plans and a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.

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Gregory Pennington are founder members of DEMSA (Debt Managers Standards Association).

DEMSA are the first trade body within the finance industry to successfully secure approval for its code of practice under the OFT Consumer Codes Approval Scheme (CCAS).