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The Real Cost of Lunch

June 29, 2011

CHESTER, England, June 29, 2011 /PRNewswire/ –

        - UK consumers' average 'small transaction' is GBP6.34 for a
          debit card and GBP6.63 for a credit card
        - Latest figures reveal card spending on small purchases hits
          GBP810 million per week
        - Increase in contactless cards should see further amount of
          'small transaction' spending

The latest figures from the British Retail Consortium (BRC) indicate UK
consumers are increasingly turning from credit cards
[http://www.moneysupermarket.com/credit-cards ] to cash and debit cards, with
debit card transactions up 15.8 per cent in the last year. Research from
moneysupermarket.com* reveals insight into the spending habits of people
using debit or credit cards, and how they regularly choose to pay for
everyday ‘small transactions’ under GBP10 on their cards.

According to the moneysupermarket.com
[http://www.moneysupermarket.com/credit-cards ]* research, over half of Brits
(56 per cent) are using their debit card to purchase items under GBP10, with
an average of 3.2 transactions a week. The research also revealed the
average transaction was GBP6.34meaning UK consumers are funding a
whoppingGBP560 million** worth of small purchases on their debit cards; which
amounts to just over GBP20 per week and over GBP80 per month for each
individual.

Despite the decline in overall credit card usage found by the BRC,
Britons’ spending on ‘small transactions’ still remains high, with almost a
quarter of consumers (23 per cent) still funding small purchases on their
credit cards. The average spend for these transactions is GBP6.63, and an
average number of weekly transactions of 3.4, means the nation’s weekly bill
for small transactions on credit cards is over GBP250 million ***.

Someone spending GBP22.50 per week on their credit card, GBP90 per
month, risks paying an extra GBP105.06 in interest over 12 months if they
fail to pay off their balance in full, meaning a cheap lunch can end up much
more expensive than they realise.

The rise of contactless cards is likely to fuel the number of small
transactions being paid for on credit. The UK Cards Association**** has
already seen an increase in contactless card usage from 13.8m transactions
in January this year to 15.1m in March, and we can expect to see these
figures increase even further as more card providers issue contactless cards
and retailers install terminals to accept these type of transactions.

Kevin Mountford, head of banking at moneysupermarket.com
[http://www.moneysupermarket.com/credit-cards ] said: “Paying for a low-cost
purchase using a debit or credit card is convenient, and with the onset of
contactless technology, getting even easier. However it is easy to fall into
a trap and be caught out by not keeping a close eye on these smaller
transactions – they soon mount up.

“If you accidentally stray over your authorised overdraft limit or fail
to pay off your credit card in full at the end of the month, it could end up
costing you dearly and that ‘cheap’ lunch may end up being far more
expensive than you anticipated.

“If you can’t afford to pay off your credit card in full each month
don’t use it to pay for everyday spending such as your lunch or coffee on
the way into work.

“For those who already have an outstanding balance on their credit card,
it is important to look how to clear that debt as quickly as possible.
Consider moving the debt onto a credit card offering zero per cent interest
on balance transfers such as the Barclaycard Platinum with Extended Balance
Transfer which offers 20 months interest free could be a good option.”

Notes to Editors:

*Opinium Research conducted research between 21st and 23rd June 2011,
amongst 2,013 nationally representative adults aged 18+

** Average spend (GBP6.34) multiplied by average transaction number
(3.2) = GBP20.29. Those making small transactions on a debit card – 56 per
cent of total adult population (49,121,000) = 27,645,298. 27,645,298 X
GBP20.29 = GBP560,923,069.42

*** Average spend (GBP6.63) multiplied by average transaction number
(3.4) = GBP22.54. Those making small transactions on a credit card – 23 per
cent of total adult population (49,121,000) = 11,297,830. 11,297,830 X
GBP22.54 = GBP254,653,088.20

**** according toUK Card Association UK Plastic Card report 2011

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        For further information, please contact:
        Paul Lawler
        PR Manager (Financial Services)
        +44(0)1244-370317
        paul.lawler@moneysupermarket.com

SOURCE moneysupermarket.com


Source: newswire



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