The use of credit cards hit a plateau in 2005, the Association of Payment Clearing Services (Apacs) says.
Spending on credit cards climbed just 1% to £124bn, while the number of transactions dropped by 1% to 2.1 billion, Apacs said in a report.
The number of card holders who repaid their borrowing in full each month rose from 56% to 59%, and 95.3% of all spending in 2005 was repaid.
Apacs says credit card use has become even more cautious this year.
It points to recent figures from the Bank of England which showed that in August credit cards users repaid more money than they borrowed.
That was the first time this has happened since May 1994.
The net repayment of credit card debt stood at £311m that month, though it still left £55.4bn outstanding on credit cards. “Our figures show that UK credit cardholders are reining in their spending and concentrating on repayments – a trend which has continued throughout this year,” said Sandra Quinn of Apacs.
“Nervousness about economic growth could well have contributed to the reduction in credit card spending and higher repayments, alongside media speculation about whether consumers are borrowing responsibly.”
The tailing-off in the popularity of credit cards, which has been visible for the last couple of years, is also due to the continued growth in the use of debit cards.
The use of these cards, which draw funds directly from users’ bank accounts, overtook credit cards in 2001.
By 2005, debit card usage overtook cash as well for the first time, with £89bn being spent on debit cards in shops, stores, supermarkets and online, compared to just £81bn changing hands as notes and coins.
Not only are debit cards replacing cash, they are also taking the place of credit cards for certain larger transactions.
Among them, says Apacs, were paying stockbrokers and lawyers, paying for cars and funerals – not to mention paying off credit card bills themselves.
The average value of a debit card purchase last year was £42, although 87% of these purchases were for sums less than that.