Shoppers choosing cash rather than credit

April 22, 2008 by admin
Filed under News, News-Credit-Cards

Consumers are cutting back on their credit card spending and increasingly using cash to pay for their purchases, it has been claimed.

A survey of 17,000 shops conducted by the British Retail Consortium (BRC) revealed that cash was used for 60 per cent of transactions last year, up from 54 per cent in 2006.

The BRC said this shows people are concerned about spending money they do not have and want to keep tight control of their finances.

Another issue raised by the BRC is the cost that credit card companies charge retailers, which is four times the amount of a cash transaction.

Consumers are forced to pay for the extra charges as retailers pass them on through increased prices.

“There should be a lower fixed fee per transaction which actually reflects the cost of processing, so new technology brings balanced benefits to retailers, consumers and banks,” said BRC director general Stephen Robertson.

Savings expert at Scottish Widows, Anne Young, recently said that young people get into trouble due to the “proliferation of credit” that is now available to them, adding that more should be done to educate people on managing their credit.