It comes as no surprise that many people in the UK choose to do at least some of their shopping online, but it seems that more of us are spending using our regular debit cards as opposed to credit cards. At a time when many people are anxious over their levels of personal debt, putting those credit cards away seems like a sensible option.
According to figures released by the UK Cards Association, £35bn was spent online using debit card payments; marginally more than the £34bn spent using credit cards. As further proof that more of us are confident in spending using our current account cards, they also revealed that around 210 transactions per year were made with their cards, 10 more than the previous 12 month period.
Cards on the table
The vast majority of people in the UK – around 91% of us – own a credit card, while a more modest 61% have a credit card. This stat shows that owning a card is vital when needing to shop online and it seems that this country in particular is keen on online shopping. The OECD claimed UK consumers were more likely than those in other rich nations to shop on the internet.
As recently as a few years ago, people tended to approach online shopping with caution. Concerns over security of transactions and delivery options may have been to blame.
One of the main problems associated with spending money using a credit card is the possibility of having to pay surcharges for each transaction. This can make it very expensive if going on an online shopping spree using a credit card this is the main reason people choose to use debit cards. Convenience is a big factor in debt card use for ecommerce, but is there more to it than that?
Although credit card purchases are protected under Section 75 of the Consumer Credit Act, debit card purchases don’t qualify for this protection simply because they don’t form part of a credit agreement making them less secure.
“The FSA rules state that if you deny having authorised an online payment and claiming to be victims of fraud the banks should give customers the benefit of the doubt and while debit card protection offered isn’t a legal obligation it is possible for you to claim a refund if a card is proven to be used fraudulently,” commented a spokesperson from Yorkshire Building Society.
Online shopping is likely to keep growing for the foreseeable future, especially as many high street retailers continue to struggle with problems like lower footfall in town centres and retail parks, low consumer confidence and the convenience factor that ecommerce has. Despite that, the picture reflecting the way in which money is spent by consumers online is still a little muddied.
Saving or spending?
For many households, ways of saving money is a great importance and emphasis on getting value for money, using a card for regular savings accounts is a no-no.
This means that, for many households with modest incomes that can only stretch so far, they have to take out a credit card for important purchases.
There is a fine balance between using credit and debit cards to shop online. If you get it right, you don’t have to pay through the nose for every single transaction, but making sure you can afford what you want is just as, if not more important.