Britons are using their credit and debut cards more than ever according to a report complied by Market analysts Datamonitor. A record £436.47 billion was spent on plastic last year as consumers continue to leave their cheque books at home, and would rather not carry larger sums of hard cash on their persons.

Spending on credit, debit, charge and store cards increased by 11% against the same period the previous year. Plastic card transactions also accounted for 60% of all household expenditure - compared to 44% in 2000 and 26% in 1995.

The author of the report, Kieran Hines, said, "Cards are swiftly becoming the dominant payment method of choice for a growing number of consumers in the UK, continuing to replace both cheques and cash."

Debit cards proved to be the most popular with a total of £288.13 billion being spent on them during the year, a rise of 17% against the previous year. Credit card spending rose by 9% to £117.9 billion and charge card usage increased to £26.07 billion, a rise of 5%.

Store cards have proved to be less popular as spending on these dropped by 17% to just £4.3 billion. It is thought that consumers are becoming aware of the high charges associated with this type of credit.

The increase in use of plastic has borne advantages for the consumer with the average interest rate charged on a credit card falling from 18.6& to 16% in March this year. It is thought that the influx of credit card providers has spurred competition into offering lower interest rates in order to retain and attract new customers.

There has also been a dramatic fall in the number of introductory offers associated with credit cards. Introductory balance transfer rates have fallen to 3.2% from 12.2% and rates offered for new purchases plummeted to 0.3% from 9.7%. It is believed that so-called 'rate tarts' - those who frequently shift their outstanding balances to continually take advantage of introductory offers - are to blame for the reduction of introductory offers as they can seriously dent a credit card firm's profit margins. The speculation is that introductory offers will soon be a thing of the past.

Hines commented, "Clearly offering APRs at below the base rate is costly for card issuers, and this has seen issuers introduce foxed fees for balance transfers in order to protect their margins. However, a glance at the US market has shown that introductory rates can comfortably exist in the most mature of markets and will therefore remain a key customer acquisition tool for UK issuers."

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