News & Views - Savantor

Recession impact on cards and issuers

Friday, 31 August 2012

Just how much of a negative effect the economic outlook is having on banks and card usage is revealed in some recent surveys and statistics.  In the UK consumers’ trust in UK banks has fallen to the extent that millions would trust high-street retailers with their current accounts, according to a poll by Uswitch.com. Just under three quarters of those quizzed say that they would trust John Lewis if it moved into banking while 46% would trust Waitrose. More than a quarter of respondents would trust Asda, 24% Amazon, 9% eBay and 2.4% would even be happy with Poundland.

On the question of who provides value for money in a banking context, supermarkets again come out on top, with 52%, compared to 48% for new entrants and just 9% for high street banks.  Given this perception, 80% of those quizzed would consider moving to a non-traditional banking provider, with nearly half saying that they are more likely to switch than they were a year ago.

UK shoppers are paying off their credit cards at the fastest rate for nearly six years according to new figures from the Bank of England.  Its latest figures showed shoppers paying back £147m in July, the highest since August 2006.  According to moneysupermarket.com this may go someway to explaining why UK cardholders are collectively sitting on £260 billion of available credit.

By comparison in Ireland consumers spent more money using credit cards in July than in the same month in 2011, the first year-on-year increase for four years.  There are over 10% fewer credit cards in issue there than were three years ago and while outstanding debt on those cards remains high, personal credit card spend rose 5% to 790 million euros ($987 million) last month, according to figures from the Irish central bank.

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