Cheque use falls at record rate

Cheque use falls at record rate

The use of cheques fell at a record rate during 2007 as the switch to plastic payment cards gathered speed, figures showed today.

Around 1.6bn cheques were written during the year - more than 10% fewer than in 2006 when a total of 1.8bn cheques were used, according to payments group Apacs.The group said the use of cheques to pay for things had been falling steadily since 1990, but the rate of decline had picked up during the past year.

Apacs spokeswoman, Sandra Quinn, said: "The main reason we have seen a massive increase in the rate of cheque decline during the past year is the death of the cheque on the high street where, increasingly, retailers have chosen not to accept cheques.

"There have also been changes by some corporations to discourage consumers from paying by cheque and using direct debits instead."

She added that the decline in the use of cheques was more marked in Scotland than in England.

Instead, people appear to be using their debit cards, with the number of transactions rising by more than 10% during the year to around 5bn.

But while the number of cheques written declined quite sharply during 2007, the total value of cheques fell by only 1.3% to £1.156tn.

Apacs said this was largely due to businesses using cheques, which helped push up the average value of a cheque to around £1,000, although the average value of a personal cheque is just £220.

Last month, high street retailers.....continued below

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Tesco and Marks & Spencer said they planned to stop accepting cheques at their tills, as there was no longer consumer demand for them to do so. They joined a host of other retailers no longer accepting them, including Sainsbury's, Morrisons, Asda, Boots and Shell.

Debt repayments

Today's figures also showed that the rate at which people are repaying credit card debt has remained high for the third year running.

The group said people paid off an average of 96% of their credit card spending during 2007, and as a result outstanding credit card balances rose by only £300m during the year.

It is the third year that repayment rates have been above 95%, and a considerable improvement on the rate of 88% five years ago.

Separate research published today by Datamonitor also highlighted the popularity of plastic payment cards among UK consumers.

Adults in the UK now carry an average of 2.8 payment cards, more than in any other country in western Europe and up from 2.4 a person in 2002. UK consumers also carried the most credit cards, averaging 1.4 each by the end of 2006, the research showed.

Datamonitor said that by 2011 it expected each adult in the UK to carry at least three payment cards.

In Norway, which has the second highest number of payment cards per person, the average number carried is 2.4, while in Germany adults have 1.6 cards each and in France they carry just one.

Credit cards are so unpopular among German shoppers that there is just one card in circulation for every 16 adults, Datamonitor said.

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