Spending on debit and credit cards increased by nearly 10% in July, compared with this time last year.

The year-on-year figures for the summer month of July’s debit and credit cards spending were released by the Barclaycard Spending Index and show an upward trend of 9.9%.

Although an indication of the use of plastic in July, the Barclaycard Spending Index does not take into account cash payments, nor does it adjust for price increases/decreases. It reflects only the value of debit and credit card spending that is processed through the Barclaycard clearing system.

The figures lead Barclaycard to the conclusion that the traditional sales and retailer discounts offered in the summer months have boosted consumer spending, which challenges much of the opinions that confidence in the consumer market has slipped.

Looking at the figures also reveals that the year-on-year returns have shown a steady increase since the start of 2010 and that July is the third month this year that the figures have increased by plus 9%.

Head of Barclaycard UK Payment Acceptance, Stuart Neal, said:
“If consumer confidence is taking a hit, it’s not happening on the high street. If spending remains at this level compared to last year, 2010 could prove overall to be a very good year for retailers.”

But although the year-on-year figures look strong, the July to June 2010 figures only show a slight increase of a touch under 2%. Barclaycard say that this might be down to consumers taking advantage of earlier sales in June as some retailers rushed out discounted items.

As to the Barclaycard Spending Index itself, it is based on spending by all debit and credit cards across 44 retail sectors. And the retailers analysed are those that use Barclaycard Payment Acceptance to process their transactions.

In all, the organisation accounts for 30% of the market, processing debit and credit card payments for 85,000 businesses in the UK.

Guest Article by Neil Camp