Spending on credit cards fell last year, for the first time since they were launched in the UK in the 1960s.
Figures from the Association of Payment Clearing Systems (Apacs) show that credit card spending dropped from £122bn in 2005 to £120bn in 2006.
The 2% fall was due to the increasing popularity of debit cards, on which spending rose by 15% to £195.7bn.
Consumers also became more cautious about borrowing on plastic because of the build-up of personal debt.
By the end of last year, says the Bank of England, this had reached a total of £1.29 trillion.
Of this, £1.08 trillion was in the form of mortgages and £213bn was in the form of consumer credit, such as credit cards, bank loans and hire purchase agreements.
But outstanding debt on credit cards alone fell back during the year, dropping from a peak of £58.3bn in January 2006 to £54.9bn in December.
"People are increasingly paying off their credit card spending, showing they are becoming a bit more prudent," said an Apacs spokeswoman.
Changing spending behaviour
Although credit card spending hit a plateau in 2005 before dropping last year, it was in fact overtaken in 2001 by spending on debit cards.
These draw money directly from users' bank accounts rather than letting a person borrow and build up a debt.
By the end of last year, debit cards accounted for nearly two-thirds of all spending on plastic.
They also overtook cash in 2005. That year, £89bn was spent on debit cards in shops, stores, supermarkets and online, compared with just £81bn changing hands as notes and coins.
Even so, credit cards are still popular and not only for big-ticket items.
Apacs figures show that at Christmas, more than half of all online spending, which has been growing rapidly, was on credit cards.
Source: BBC News Online
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