For Immediate Release
Citi Australia
Citi Australia Credit Card Index: May 2021
HIGHLIGHTS
Spend continues to increase year on year, with card applications on the rise
Highlighted Findings:
- Spend on credit cards has increased 30% year on year, with May marking the fourth consecutive month of spend at pre-COVID levels
- More Australians are signing up for cards too, with a 25.5% increase in cards acquisition compared to this time last year
- Wallet pay continues to grow in popularity as consumers embrace contactless payment methods
"At the start of the pandemic, many Australians pre-emptively cancelled their cards as they feared that their economic circumstances would drastically decline. However, the nation weathered the pandemic better than expected, and the credit card sector has been on a path to recovery since. May was not only the fourth consecutive month of spend returning to pre-COVID levels, but we also saw a 25.5% increase in new card applications compared to this time last year - a testament to local consumer confidence," Choong Yu Lum, Head of Cards and Loans at Citi Australia said.
Top 10 – spend by industry
June
| Category | % share of spend |
|---|---|
| 1. Supermarkets | 9.31% |
| 2. Household good retailing | 7.37% |
| 3. Business Services | 6.64% |
| 4. Insurance | 5.64% |
| 5. Health/Medical | 5.61% |
| 6. Legal/Tax Services | 5.26% |
| 7. Restaurants | 5.24% |
| 8. Retail Goods | 4.17% |
| 9. Sports and hobby stores | 4.06% |
| 10. Hotels, Resorts and Spas | 3.52% |
"While the top 10 categories have remained consistent over the last month, we have seen a 28% increase in money spent on legal and tax services as Australians get their finances in order for tax time. While airline and hotel spend remains low year on year, we anticipate this will pick up next month as Australian families gear up for school holidays again." Mr Lum said.
Victoria still feeling the lockdown pinch
"Victoria's current COVID lockdown is dampening spend, even though the broader Australian economy looks strong. If we compare the weekly average spend in Victoria, it dropped 2% between the 21st of May and the 28th of May when the lockdown was first introduced, and then a further 12% between 28 May and 4 June, a full week of lockdown.
"Looking forward, if past lockdowns are a good indication of consumer behaviour, then we can expect spend to recover quickly when restrictions are lifted," Mr Lum added.
Contactless pay on the rise
"On a global scale, Australians were early adopters of 'tap and pay'. This meant when we were given the ability to use Wallet pay and spend via our phone or smartwatch – many were slow to make the shift as the difference in effort between tapping your card or device was minimal.
"With the COVID related focus on hygiene, we've seen Australians keep their physical wallet at home and slowly increase their use of wallet pay. Looking at all Citi customers, we have seen a 287% increase in use of wallet pay comparing May this year to May last year. The increase has been particularly sharp amongst affluent customers (400%) and Gen Y customers (286%).
What's next?
"When school holidays approach, we typically see a peak in spend on categories like travel and leisure. Even with the Melbourne lockdown in place, I expect we'll see these spend categories surge as consumers head to the snow or for a domestic getaway," Mr Lum concluded.