Debit cards are king in the shops

Figures from the Association of Payment Clearing Services (Apacs) show that retail spending in the UK last year using debit cards rose by 9% to £89bn.

Cash spending fell by 4% to £81bn, while credit card spending was unchanged at £61bn.

Meanwhile the use of cheques continues to dwindle with only £9bn worth being written in shops in 2005.

Sandra Quinn of Apacs argued that many people and shops have got used to paying with plastic rather than cash, even for small items.

"At the end of 2004, we saw total UK spending on plastic overtake cash for the first time, signalling a real sea change in our payment habits.

"This change was mainly driven by debit card use. The 2005 figures show that this trend is continuing with debit card spending in retail outlets crashing through the cash barrier for the first time ever," she added.

Cash no longer king

The Apacs figures highlight the rapid increase in the popularity of debit cards.

First introduced 20 years ago, they have grown in use rapidly to overtake not only cheques but credit cards and now - in some circumstances - cash as well.

They now account for 37% of all retail transactions.

Cash may be dwindling in popularity in shops and stores but is still widely used elsewhere.

It is still more popular than any form of plastic when it comes to paying for travel tickets (such as train and bus fares), entertainment (for example, cinema and theatre tickets), payments to small businesses (such as plumbers) and for settling some bills.

Altogether cash to the value of £192bn was spent this way in 2005, compared with just £145bn using either debit or credit cards.