The proportion of transactions made using credit cards fell sharply last year as consumers turned to cash and debit cards to help them better manage their finances, according to the British Retail Consortium (BRC).

In its latest payments survey, the BRC recorded a 12.9% fall in the proportion of transactions made using credit cards during 2010, compared with the previous year. Over the same period, the proportion of transactions involving debit cards went up by 15.8%.

British Retail Consortium Director General, Stephen Robertson, said: “Hard-pressed customers are switching to cash and debit cards for the reassurance that they can’t spend what they haven’t got. At the same time, use of credit cards has dropped sharply. Cash remains king – used for more than half of all retail payments.”

An expert at the IVA Forum said: “As simple as it may sound, one of the best ways to stay out of debt is to avoid it altogether – and that may be the attitude of many of those steering clear of credit cards last year.

“Credit cards can serve a useful purpose, but they should only be used if you’re completely sure you can afford to repay what you borrow. For those with any doubts about how they’ll repay their balance, credit cards are probably best avoided.”