Brits prefer plastic

The UK has more payment cards per adult than any other country in Western Europe, reveals a new report* from independent market analysts Datamonitor. The average British adult now carries 2.8 cards in their wallet, more than any other country in Europe. This has grown from 2.4 cards in 2002 and is expected to exceed three cards per adult by 2011.

By comparison, even Norway, which has the second highest number of cards per adult, lags some distance behind the UK with 2.3 cards per adult. Germany has 1.6 payment cards per adult, and France has just one per adult, on average.

The fact that there are so many more payment cards per head in the UK is indicative of differing consumer habits between European countries, comments Andrew Fabricius, Datamonitor financial services analyst and author of the report. “In the UK consumers use debit cards for day-to-day spending much like their European counterparts, but are increasingly using credit cards as borrowing tools, applying for new credit cards to transfer an outstanding balance and to take advantage of interest free offers. In most other countries, consumers do not view credit cards as a borrowing tool and as a result they are not so popular,” he says.

Credit cards most popular in the UK

More notable is the extremely high number of credit cards** per adult in the UK. At the end of 2006, the average adult had 1.4 credit cards, twice that of the next most penetrated market, which is Norway, with 0.7 cards per adult. In Spain, there are just 0.4 cards per person, and in Germany, where credit products are very unpopular, the figure is as low as 0.06, or approximately just one card for every 16 adults.

“The high penetration of credit cards in the UK is due to consumers being happy to pay for goods and services by using credit and enjoy the flexibility of paying for purchases over a longer period of time. By contrast, consumers in Germany have a more disciplined attitude towards expenditure and as a result credit cards are far less popular,” Fabricius says.

Growth in credit cards forecast

However, a slowdown is afoot. In terms of total card numbers, the UK credit card market is predicted to grow at an average annual growth rate of just 0.2%, the slowest growth rate in the region. By contrast, several other markets, especially those with underdeveloped credit card markets will see significant growth.

In particular, the number of cards in Germany is expected to grow at average annual rate of 26% to 2011, and France at 21%, Fabricius says. “These markets will see significant growth as consumers become more accustomed to the flexibility that credit cards can offer.

“Nonetheless, the UK is expected to remain the biggest market in terms of cards per person for the foreseeable future,” he says.

* Western European Cards Database 2007

** By credit cards, Datamonitor refers to payment cards with which the cardholder can revolve a balance from month to month, as opposed to a charge card that has to be paid off in full at the conclusion of each billing cycle.

Datamonitor's Western European Cards Database gives a detailed overview of the key trends and developments in the payment card markets across 16 European markets. Full market data and five-year forecasts are provided for the credit, debit, charge, and private label markets, along with credit and private label competitor figures.