Debit cards ‘could raise debt levels’

The increased uptake of debit cards could result in higher debt levels as retailers raise prices to cover processing costs, it has been warned.

UK payments association Apacs advises that retailers wishing to accept payments by debit card are likely to be charged a fee as a percentage of the value of the transaction.

And a spokesperson for Apacs suggests this could be passed on to customers, putting them at an increased risk of raising their personal debt levels.

“The retailer will add that to the total cost - it will just be part of the process,” Apacs’ Simon Bennett claims.

He adds that the problem is likely to rise as “more and more people are choosing to use their debit card rather than carry lots and lots of cash”.

Those using plastic to pay for their groceries could be worst hit, as Apacs figures show checkout transactions account for over a third of all debit card payments.

For those who use more credit than debit, there are options to help with credit debt management.

22 June 2007 | Credit Card Debt | Comments