This is free marketing research on the European payment cards industry and can include information on the background, market structure, definitions, competitors, trends and developments of payment cards and is related to other topics such as banking and finance.

Payment cards: UK use far exceeds other European markets

Research has found that UK consumers use payment cards far more than their European counterparts.

The UK has more payment cards per adult than any other country in Western Europe. The average British adult now carries 2.8 cards in their wallet, followed by Norway, which has the second highest number of cards per adult at 2.3. The UK average has grown from 2.4 cards in 2002 and is expected to exceed three cards per adult by 2011. However, other European markets are expected to catch up.

The fact that there are so many more payment cards per head in the UK - Germany and France have an average of just 1.6 and one per head, respectively - is indicative of differing consumer habits between European countries. In the UK, consumers use debit cards for day-to-day spending much like their European counterparts, but are increasingly using credit cards as borrowing tools, applying for new credit cards to transfer an outstanding balance and to take advantage of interest free offers. In most other countries, consumers do not view use credit cards in this way and, as a result, they are less popular.

More notable is the extremely high number of credit cards per adult in the UK. At the end of 2006, the average adult had 1.4 credit cards, twice that of Norway, the next most penetrated market, with 0.7 cards per adult. In Spain, there are just 0.4 cards per person, and in Germany, where credit products are very unpopular, the figure is as low as 0.06, or approximately just one card for every 16 adults.

There is a high penetration of credit cards in the UK as consumers are happy to pay for goods and services with credit and enjoy the flexibility of paying for purchases over a longer period of time. By contrast, consumers in Germany have a more disciplined attitude towards expenditure and, as a result, credit cards are far less popular.

However, a slowdown is taking place. In terms of total card numbers, the UK credit card market is predicted to expand at an average annual growth rate of just 0.2%, the slowest growth rate in Europe. By contrast, several other markets, especially those with underdeveloped credit card sectors, will see significant growth. In particular, the number of cards in Germany and France are expected to grow at average annual rate of 26% and 21%, respectively, to 2011.These markets will see significant growth as consumers become more accustomed to the flexibility that credit cards can offer. Nevertheless, the UK is expected to remain the biggest market in terms of cards per person for the foreseeable future.

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