Consumers spent £50bn in one month on cards for the first time ever as strong economic conditions persisted in March and people continued to move slowly but steadily away from cash. The number of card transactions rose by 6.9 million to 1.06 billion with spending being fuelled primarily by debit cards rather than credit cards.

Service spending on cards outstripped retail sales three-fold, which has seen a slowdown in growth stemming from low inflation. Card spending on services and retail sales grew by 10.3 per cent and 3.6 per cent respectively to £26.6bn and £23.4bn. Spending on fuel fell by £21m to £2.5bn, which was a key contributor to low inflation levels and modest growth in retail sales. Whilst in contrast strong spending in areas such as entertainment – up £30m to £4.1bn – drove the double digit growth for services.

Contactless and online spending continue to play an increasingly prominent role in how consumers use their cards, with contactless payments now accounting for 4.4 per cent of all card purchases and internet shopping accounting for 11.5 per cent.

Richard Koch, Head of Policy at The UK Cards Association, said:

“With inflation at its lowest for a generation we might have expected a significant slowdown on the amount spent on cards. But with shoppers feeling confident about the economy and an increasing reliance on cards over cash, particularly for small payments, card spending continues to grow at a much faster rate than retail spending by other means. This continuing trend has been fueled by consumers spending on their debit cards rather than on credit cards.”