In case you didn't know, a new report has found that UK consumers are the biggest credit card users in Europe.
Plastic cards have always been popular in the UK, both as a payment and a borrowing tool. Moreover, the gap looks set to widen as the UK card providers increasingly choose to mirror US practices in order to encourage further growth.
According to the Credit Card Research Group (CCRG), at the end of 2001 almost 60% of UK adults owned a credit card and 84% had a debit card. This makes the UK the most developed card market in Europe and the second in the world after the US. In continental Europe, however, the study found that spending on credit and debit cards stands on average for just 9.6% of GDP, compared to 20.3% in the UK.
To a large extent the findings of the study are no surprise. Since their inception, plastic cards have always been more popular among UK consumers than their continental counterparts, both as a payment and a borrowing mechanism.
In mainland Europe, plastic cards are struggling to overtake more established payment methods as easily as they did in the UK. In Germany for instance, bank transfers are the payment method of choice, in France checks are still commonly used while in southern markets, such as Italy and Spain, cash is still king.
That is not so say that payment cards are unpopular on the continent. On the contrary, French consumers are among the greatest users of payment cards in the world, but they are just as likely, if not more so, to use store cards than Visa.
Consumers on the continent are far more averse to using credit to fund their spending than their UK counterparts. Moreover, on the occasions that they do borrow, they are more likely to make use of other lending mechanisms, such as overdrafts and point of sale finance.
The UK card market is therefore something of anomaly in Europe. Industry opinion is that the gap is likely to widen as the UK follows the direction of the US market. Many issuers such as Barclaycard are already looking to encourage growth by targeting consumers further down the credit risk scale. The day when continental issuers choose to follow a similar route seems a very long way off.
