LONDON: For the first time since UK credit card marketing began in 1966 with the launch of Barclaycard, Britons' love affair with plastic is beginning to cool - driven by growing disenchantment with card issuers' grabby interest rates and awareness that the good times can't roll forever.
According to the latest data from Euromonitor International, average annual credit card expenditure per head fell from £1,978 ($3,857; €2,936) in 2005 to £1,900 last year - the first ever downward trend. Nonetheless, Brits spent around £1,000 more each on their cards than any other European nation.
The UK credit market overall is reportedly worth some £250 billion - equivalent to one third of all unsecured debt in western Europe. The average UK household owes over £3,000, notes Euromonitor.
Says the researcher: "UK consumers are now less willing to get into debt on credit cards with high APR (annual percentage rates), turning instead to longer-term secured and unsecured loans which offer better value for money."
In the wake of the 3.94% decline in 2006, Euromonitor predicts a further 3% fall in credit card debt in 2007. But the card issuers aren't inclined let such juicy prey slip from their jaws without a struggle.
Instead of reducing interest rates, the industry plans to launch a variety of customer retention schemes. One such stratagem is Barclays Combination Card which converts credit card debt into a personal loan.
Data sourced from Telegraph.co.uk; additional content by WARC staff