Plastic replaces even small denomination purchases

Britons are regularly using credit and debit cards to pay for items which were once purchased with a fiver or less, new research for Debenhams Personal Finance has revealed. Cards rather than cash are often handed over for coffees and snacks in local cafes, sandwich bars and pubs.

The study found a similar picture in newsagents and sweet shops with the purchase of magazines and confectionary now frequently made with plastic.

Debenhams looked at latest industry figures for spending by card in high street outlets where previously the bill would be settled with a handful of small change. The number of transactions using credit and debit cards has risen by almost 40% from 7.4 billion in 2008 to 10.2 billion this year, but the value of the average transaction by credit and debit card has dropped.

A Debenhams survey found the trend is being led by younger adults who enjoy the convenience of plastic in their everyday spending for everything from a skinny latte to a glossy magazine. Almost one in three (31%) 18-35 year olds said they used a credit or debit card for purchases under £10 at least once a week and 19% said they used plastic for purchases of £5 or under.

The study revealed that the top ten items purchased by card which cost £5 or under included a coffee in the number one slot, chocolate, sweets and crisps, second and soft drinks third. Newspapers, magazines and a pint of milk and a loaf of bread also made the list.

Those under 35 told researchers the main reasons for using a card was “convenience” and “not having to carry cash”. The savvy ones among them say they are also channelling their use of cards to certain providers who offer cash-back and loyalty schemes.

However, not all take card convenience for granted, with 7% of those that regularly use a card for purchases under a fiver admitting they frequently check with the cashier in a shop if it is OK to do so, or apologise for the transaction being so small.