Britain the Credit Card Capital of Europe

The UK spends nearly three times as much on Visa and Mastercard branded credit cards as the rest of the EU put together, according to a new report from Mintel. Total EU credit card spending is up 76% from the equivalent of c.139bn Euros (£93bn) in 1998 to 244bn Euros (£165bn) now.

The UK spent over £120 billion (180bn Euros) on credit cards in 2003. On the continent debit cards and cash are much preferred - according to Mintel senior finance analyst Paul Davies this is likely to be because debit cards give people greater control over their money and spending. Europeans spent almost three times more on debit cards (673bn Euros - over £450bn) than on credit cards, and debit card spending is growing faster than that on credit cards, up 111% versus 1998.

Davies says that a prime factor in the growth of credit card use is the presence of low nominal interest rates across Europe in the last few years, something which may be about to change, and already is changing in the UK.

'The figures clearly show how different the attitude towards credit and borrowing money is in the UK compared to other EU countries' says Davies. 'Today the British consumer is constantly bombarded by adverts for loans, purchasing on credit and credit cards and it seems that debt has become just a part of life for many people in the UK'.

Britain also has more than three fifths of the EU's credit cards. In 2003 the number of Visa and Mastercard branded credit cards in the EU reached 105 million, going over the 100 million mark for the first time. This represents a 67% increase on the 63m cards that were in circulation in 1998 and is some 8m more than in 2002. 63.9m of the cards are in the UK, which is the only EU country with more credit cards than adults and the only one except Ireland with more credit cards than debit cards.

Spain is way ahead of the rest of the continent (ie excepting the UK) in terms of numbers of credit cards - it has 17.9m in circulation. Third is Italy with 5.7m, then Greece with 4.3m, France with a tiny 2.8m and Germany a miniscule 2.3m.

The top five countries in terms of credit cards per head (ie number of cards in circulation divided by the population of adults) are the UK, Luxembourg, Ireland, Spain and Greece respectively.

The increase in the number of transactions since 1998 is roughly commensurate with the increase in spend minus inflation - up 53% to 2.75bn transactions on Visa and Mastercard in the EU in 2003. In the UK there were around 1.82 billion transactions in 2003, an average of 28 transactions a year for each card.

'European Credit Cards' is part of the 'Marketing to Tomorrow's Consumer' report, which is available from Mintel - further information is available from www.mintel.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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