However, the UK Cards Association also said in the longer-term it is also possible to see the "end of the road" for plastic as other methods such as mobile phone payments gain more popularity.

Total spending on cards in the UK is set to soar from 9.9 billion payments worth ￡477 billion last year to 17.3 billion payments with a value of ￡840 billion in 2022, according to the trade body's forecasts.

The association said that in the coming years, most of the growth will come from debit cards, which were first introduced 26 years ago.

Nine in 10 (91%) UK adults have a debit card in their wallet or purse, equating to almost 47 million debit card holders across the country. The number of debit card holders grew by around one million compared with 2011, which is in line with growth seen over the last decade.

Innovations in technology which make card use more convenient will drive the upswing, helped by younger people who have grown up with cards and already in a strong habit of using them, the report said.

This includes the expansion of "tap and go" contactless payment technology for low-value items where people have traditionally used cash.

Contactless payments allow people to pay for goods worth ￡20 or less with a single swipe of their card on a reader, without consumers having to key in a pin number.

The number of debit and smart card enabled to make contactless payments grew by 38% in 2012 to reach an estimated 31 million and major chains such as Superdrug, WH Smith, Marks & Spencer and Greggs as well as the Post Office now accept contactless payments.

By March this year, around 120 contactless transactions were being made per minute. This figure is predicted to rise to 300 transactions a minute by the end of 2013.

The growth in online spending is also boosting card use, with total online card spending increasing by ￡5 billion in 2012, the UK Plastic Cards report said.

Online debit card spending has now overtaken online credit card spending, with debit card spending totalling ￡35 billion last year, compared with ￡34 billion placed on credit cards.

Despite the predicted growth for plastic, the report said that the "end of the road" could be on the horizon as other ways to pay, such as using mobile phones, take over.

The report highlighted the Barclays PayBand as an example of the new wave of technology. Visitors to last year's Wireless festival were given wristbands which were enabled with contactless technology, allowing them fast entry onto the site and to make purchases at the event.

However, it said that it "remains to be seen" how popular some of the new innovations will be among the older generations, many of whom still tend to use credit cards.

"We will continue to need plastic cards for use at locations that do not enjoy the benefits of mobile and wireless signals and when technology fails merchants will still need to be able to fall back to a traditional, contact chip and pin, transaction," the report said.

Some 61% of adults have a credit card, adding up to 30.3 million credit card holders. The number of credit cards has held steady since 2005 at around 30 million.

The report said that the profile of credit card holders is also ageing more rapidly than the population generally, reflecting in part younger people's preference for debit cards.

New York Attorney General Eric Schneiderman launched an inquiry yesterday into 20 companies where the practice may be common—mostly retail and restaurant enterprises. His investigation follows a lengthy article on the practice in the New York Times on Monday. “We are concerned about excessive or insufficiently disclosed fees which may unduly reduce employees’ take-home pay,” Schneiderman’s office said in letters to the companies.

Employees, it turns out, have to consent in writing to being paid in plastic. If the cards were a condition of employment, the companies offering them could be in for some trouble. The Times talked to many employees who said they had no choice in the matter.

Wal-Mart spokesman Randy Hargrove said all of the retailer’s employees can opt for direct deposit or paper checks, though it considers its payroll cards extremely “employee-friendly.” Hargrove, who declined to say what share of Wal-Mart workers are paid on plastic, said the company detailed the program to the New York Department of Labor shortly after it began in 2009.

Fees aren’t the only place where the cards may pinch users. Many studies have shown that people spend more when they use cards rather than cash. Behavioral economists refer to the phenomena as “decoupling”—when a consumer is literally separated from cash and psychologically insulated from the “pain” of a purchase.

Casinos are familiar with the dynamic: It’s the main reason they use chips. It isn’t novel to banks, either. Behavioral economist Richard Thaler called credit cards (PDF) “the best decoupling device.” In a 2009 trail in India, Citibank found that consumers who opted to “tap and pay” via cell phone spent significantly more than they otherwise would have.