Figures from UK Finance show that the annual growth rate of outstanding credit card balances fell by 12.6% in the year to May, as consumers continued to pay down their credit card bills.

The total value of credit card transactions rose from £8.7bn in April to £9.6bn in May.

However, the value of spending on credit cards was 44.7% less than in the same month a year earlier, possibly reflecting reduced demand for big ticket items often bought on credit.

Debit card transactions saw a drop of 7.9% in May on the previous month, with a total spend of £47.7bn. This was 7.8% lower than in May 2019.

Overall, card spending in the UK in May was down 39% year-on-year, as people continued to grapple with the fallout from the Covid-19 crisis.

Retailers across the country continued to encourage customers to use contactless payments, which drove £4.5bn of spending across 440 million transactions. This was an increase from 404 million in April.

However, the figure is still down 39.1% from the same month in 2019, as restaurants, bars and pubs remained closed and public transport was limited to essential travel only.

Eric Leenders, managing director of personal finance at UK Finance, said: “The pandemic continued to have a huge impact on how people spent their money in May, with restrictions impacting spending for both credit and debit card customers. Maintaining the downward trend over the last few months, consumers continued to pay off their credit card balances in May.

“The banking and finance industry has a clear plan to help the country through this unprecedented period and has put in place a number of measures to help customers adapt to the new economic environment including the contactless limit increase to £45 and support for those struggling with their finances. As the economy begins to open up, we anticipate spending levels to increase and the industry will continue to support customers to help them through this difficult and uncertain time.”