Consumers ‘swap credit cards for cash’

Consumers are choosing to pay with cash rather than credit cards in an effort to rein in their finances, a recent study by the British Retail Consortium (BRC) has suggested.

In a survey of 17,000 shops it was revealed that cash had been used for 60% of transactions carried out last year – up from 54% in 2006.

BRC Director General, Stephen Robertson, said cash was ‘alive and thriving,’ with an increasing number of shoppers choosing to curb the outgoings on their credit cards.

‘Hard-up customers are increasingly reluctant to spend money they haven’t actually got in their hands,’ he said.

‘While total retail spending continues to grow, there is a widening gap between the amount spent in cash and the amount spent using cards, suggesting customers want to keep tight control of their finances.’

The BRC report also urged credit card companies to reduce the charges they impose on retailers, revealing that a £20 transaction would cost the retailer four times more if paid with a credit card rather than cash.