Citi Australia
Citi Australia Credit Card Index: February 2021
HIGHLIGHTS
It's business as usual as spending recovers in February
Highlighted Findings:
- Following a 19% spending dip in January, Citi has seen a 28% spike in daily average spend in February.
- This uplift in spending matches the levels we were seeing in the Christmas period, demonstrating consumer confidence is building and spend levels are returning to pre-COVID levels.
- With the new year in full swing, consumers continue to spend more on administrative purchases as opposed to leisure, with Citi recording an 80% increase in customer spend on Legal and Tax Services.
"As anticipated, spend has increased significantly in February following January's holiday season spending hangover. February's 28% spike in daily spend has recovered to pre-COVID levels, indicating the new year is in full swing and consumers are making the most of a predominately lockdown-free month," said Choong Yu Lum, Head of Credit Cards at Citi Australia.
Top 10 – spend by industry
February
| Category | % share of spend |
|---|---|
| 1. Supermarkets | 9.63% |
| 2. Household goods retailing | 7.83% |
| 3. Business services | 6.75% |
| 4. Insurance | 5.92% |
| 5. Legal/Tax Services | 5.91% |
| 6. Health/Medical | 10.73% |
| 7. Restaurants | 8.55% |
| 8. Sports and Hobby Stores | 6.72% |
| 9. Retail goods | 6.31% |
| 10. Education | 5.25% |
"Much like February, March is a month where consumer focus on life administration over leisure activities. We've seen a jump in spend for Legal & Tax Services as families increasing more than 80% from last month – a trend that is consistent year on year. With children heading back to school this February, education spend has also more than doubled." Mr Lum said.
Consumers embrace Mobile Wallets
"With COVID, we saw society pushed to increase their digital adoption across many channels – whether they increased their online spend, or preferred to engage with companies digitally as opposed to physically. In line with this, our customers are increasingly likely to opt for mobile wallet payments, which have more than doubled compared to this time last year. Leading the charge is Gen Y, who are almost three times more likely to pay via Wallet than their baby boomer counterparts, and twice as likely compared to Gen Z." Mr Lum said.
The Buy Now Pay Later effect
"As Buy Now, Pay Later (BNPL) services continue to rise in popularity, Citi saw its cards instalments sales exceed pre-COVID levels in February. Similar to the BNPL offerings in the market, instalments allow consumers to break down a payment on their credit card into a series of smaller payments. This is an indication that consumer attitudes to using their credit card is changing, and they are looking for innovation from credit card providers to give them more control over their credit." Mr Lum said.
What's next?
"With restrictions easing across most states, consumers are enjoying a sense of normalcy again and the increase in credit card spend reflects that. As the vaccine rolls out in the coming months, we have an optimistic outlook on spending habits as we hopefully begin to usher in the post-pandemic era." Mr Lum concluded.