By Charlotte Beugge

The number of credit cards in circulation fell by one million last year to the lowest level seen for years and the long-term trend in card usage is resolutely downwards, according to the Precious Plastic report from PricewaterhouseCoopers (PwC).

Credit card borrowing fell by 5% last year, with the average balance at around £1,000. And debit cards were used for payments more last year than cash for the first time ever.

The report adds that customers discarded nearly one million credit cards last year, "down to levels not seen for almost a decade".

Simon Westcott, a director in PwC's financial services practice, says: "45 years since it was first introduced the credit card is suffering a mid-life crisis.

"The longer term trend suggests that numbers will continue to decline with the younger generation showing a preference for debit cards and emerging digital alternatives such as mobile payments."

Mr Westcott states that those who have turned against credit cards now won't change this stance and are unlikely to want to take out cards later in life.

He also adds that there could be a change in credit cards with more imposing annual fees as regulators demand that financial companies are more upfront about the way they charge.

Those with credit cards continued to pay back their debts last year, paying off around £355, yet Brits remain among the deepest in debt in the world, typically owing £7,900 in personal loans, overdrafts and credit cards. PwC says that by 2013, this will have fallen to £7,500.