A new trend coined “plastic pinching” is threatening the credit industry in an already tight economic environment, a new survey out today reveals.
Consumers spent an overwhelming £4.4bn less on their credit cards in the first half of 2008 than during the same period last year, according to research conducted by customer insight specialist G2 Data Dynamics. Only six per cent of consumers said that they have spent more on plastic over the last six months.
A survey among members of G2’s ViewPoint online panel of 30,000 UK consumers showed overall spending was well down between January and June this year, compared with the same six months in 2007. When extrapolated across the UK’s 45 million adults this equates to £4.4bn less splashed out on plastic.
Additionally it seems that males really do wear the trousers in an economic downturn, with 28 per cent of women spending less on their cards. In fact, one third of women now admit to not owning a credit card, compared with one in five men.
There is a consistent overall reduction in spend across all regions. Plastic pinchers of the highest order live in Wales, followed closely by Northern Ireland, with people in East Anglia and London also feeling the pinch.
Top 4 regions spending less on credit cards:
2. Northern Ireland
3. East Anglia
Age groups spending less on credit cards:
Among the most affluent groups in the UK, overall spend was largely unaffected, but among less affluent consumers a ratio of 6:1 said they had reduced credit card spending.
Alan Thorpe, Commercial and Operations Director at G2 Data Dynamics, said: “Whilst there has been a general slowdown in consumer spending, “plastic pinching” is more likely due to a redirection of spending towards ‘essentials’ such as food, energy and mortgages, which many would not normally pay for using a credit card.
“With little surplus cash about, it’s essential that companies listen to their customers and give people the products and services they want. It is also crucial that they maintain ongoing contact with customers during this downturn, to ensure spending bounces back when the economy recovers.”
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