More than 5 in 6 shop purchases are now carried out by card, the British Retail Consortium has found - how to make money from yours
The most recent figures show we’re using credit and debit cards more frequently than ever before.
Figures released by the British Retail Consortium (BRC) show 82% of transactions are now carried out by card - that’s more than five purchases in six.
But most of these are being carried out with the wrong sort of card.
The latest data from UK Finance shows that in August we spent £64.1 billion on debit cards, while credit card transactions accounted for less than a third of that at £20.1 billion.
But by preferring debit cards to credit cards, Britons could be making an expensive mistake.
That’s because a huge number of those 2.1 billion debit card transactions, working out at 40 a month for each adult in the UK, could have been earning credit card rewards.
And provided you clear your balance in full each month, you’ll never pay a penny of interest on that spending.
Simply set up a direct debit from your bank account to cover your full credit card statement, then put your day-to-day spending on the rewards card and you'll earn a little extra every single month afterwards.
Just how much are people missing out on? Well even at 0.5% cashback, that’s £320 million of rewards going begging in a single month.
The secret to getting the best out of a rewards card is to know how your deal works.
For example, many cards come with introductory bonuses, where you get more points if you spend a certain amount, in a certain store, within a certain time.
Many cards pay far more for spending in certain shops too - with supermarket cards often tripling rewards for spending in store.
But, most importantly, never spend more than you can afford to repay that month in the hunt for points.
That’s a losing game, with a few more points here and there almost never making up for missed payments, interest charges and the damage to a credit score that can result from spending more than you can afford to repay.