Last updated 14:12, Thursday, 21 February 2008

The use of cheques fell at a record pace during 2007 as consumers reached instead for their debit cards.

Around 1.6 billion cheques were written during the year, more than 10 per cent less than in 2006, when a total of 1.8 billion cheques were used, according to payments group APACS.

The group said the use of cheques to pay for things had been falling steadily since 1990, but the rate of decline picked up last year.

APACS spokeswoman Sandra Quinn said: “The main reason is the death of the cheque on the high street, where increasingly retailers have chosen not to accept cheques.

“There have also been changes by some corporations to discourage consumers from paying by cheque and using direct debits instead.”

She said the decline in the use of cheques was more marked in Scotland than in England.

The UK’s biggest supermarket group Tesco and high street chain Marks & Spencer both recently said they would stop accepting cheques as payment, joining a host of other retailers who no longer accept them, including Sainsbury’s, Morrisons, Asda, Boots and Shell.

Instead, people appear to be using their debit cards, with the number of transactions made using a debit card rising by more than 10 per cent during the year to around five billion.

But while the number of cheques written declined sharply during 2007, the total value of cheques fell by only 1.3 per cent to £1.156 trillion.

APACS said this was largely due to businesses using cheques, which helped to push up the average value of a cheque to around £1,000, although the average value of a personal cheque is just £220.

Today’s figures also showed that the rate at which people are repaying credit card debt has remained high for the third year running.

The group said people paid off an average of 96 per cent of their credit card spending during 2007, and outstanding credit card balances rose by only £300 million.

It is a considerable improvement on the repayment rate of just 88 per cent five years ago.