IMGCAP(1)]
Forty percent of credit cardholders in the United Kingdom are spending less on their credit cards than they were a year ago, suggest survey data from Auriemma Consulting Group, which has offices in New York and London. The finding is based on Web surveys of 503 credit cardholders conducted during the first quarter. Fewer consumers are carrying credit card balances, too. The survey found that 35% of respondents carried balances during the quarter, down from 63% who did during the same period last year, according to the group's latest "Cardbeat" report. "Many consumers appear to be bracing themselves for future economic uncertainty [by] paying down balances and becoming less likely to carry a balance at all," the report states. "Issuers will be forced to face decreased interest income. To maintain portfolio profitability, many issuers will develop aggressive fee-based cards." Debit card spending also decreased among survey respondents compared with two years ago. The average debit card transaction was 19.73 UK pounds (US$31.80 or 22.85 euros), down from 22.16 pounds during the same quarter in 2007. Meanwhile, MasterCard Worldwide has seen its fortunes improve in the UK, with 53% of respondents saying they use their MasterCard-branded cards "most frequently," up from 46% who said so in the first quarter of 2008 and 39% who said so in the first quarter of 2007 and 10 percentage points ahead of Visa Inc., which lead the category early last year. The report attributes the MasterCard gain to "strong marketing by primary MasterCard brands like HSBC and MBNA Europe," and to "the shift in several cobranded portfolios from the Visa to MasterCard brand."
