| |
Plastic Britain
More on the UK's credit card obsession, this time from Datamonitor. Debt levels have reached a new high, according to 'UK Plastic Cards 2004', which provides an overview of the trends and major issues facing the credit, debit and private label markets.
Average credit card balances outstanding in the UK rose by 62%, from £33.1bn (£719 per adult aged 18+) in 1999 to £53.3bn (£1,140 per adult) in 2003. Over the same period, the total number of cards on issue rose by 58%, from 41.5m to almost 65.5m. Datamonitor says this suggests that UK consumers are becoming more and more comfortable with their use, and that the market has once again defied predictions of saturation. Indeed, it predicts continued growth to almost 91 million credit cards in circulation and total transaction value of £157bn by 2008.
Multiple card holding and 'rate tarts', who essentially only use their card as a short-term free borrowing facility, are fuelling market growth.
Between them the big five banks raised their market share from 60.8% in 2002 to 63.5%, but within the top five the situation is balancing out. Barclaycard is still the biggest player but now has only 3.6m more cards in issue than the bank in 5th place, versus £7.1m more in 1999.
Despite consolidation in the market, Datamonitor notes with interest the arrival of Marks & Spencer and GE Consumer Finance and the likely entrance of John Lewis in 2004. 'Consolidation is likely to result in a mixed outcome for the consumer. Although prices may remain competitive, consumers will face a poorer choice when it comes to selecting a card product', according to Financial Services Analyst Kieran Hines.
Datamonitor's web site is at www.datamonitor.com
|
