Citi Australia Credit Card Index: October - December 2021

Highlighted Findings:

• Spend on credit cards was up 17% from the lockdown period, peaking at 43% during the November Black Friday and Cyber Monday sales.
• NSW and VIC took particular advantage of the November sales, with spend up 59% in NSW and 53% in VIC compared to the lockdown period. Freedom Day also saw an uptick in travel, dining, and personal services, such as hairdressers and nail salons, as Sydneysiders and Melburnians enjoyed increased freedoms.
• The rise in consumer spending and confidence is expected to continue as we approach Christmas and enjoy Boxing Day and New Year sales.

"As Australia opened up once again in October, following another extended lockdown period, it was pleasing to see a sharp uptick in consumer spending, providing a much-needed boost to the economy, especially in the hardest hit sectors, like travel and non-essential retail," said Choong Yu Lum, Head of Cards and Loans, at Citi Australia. "This was especially apparent in NSW and VIC, with consumers enjoying increased freedoms and a reopening of pubs, clubs, and restaurants in time for the festive season."

November sales see double digit spend growth

"The Black Friday and Cyber Monday sales drove a significant increase in consumer spending, with credit card spend up 70% on Cyber Monday compared to typical Monday sales activity during the lockdown period," Mr Lum said. "Department stores, traditional retail, and e-commerce benefited the most from this surge with consumers getting ahead with their Christmas shopping and also spoiling themselves after a tumultuous year. We expect this rise in consumer spending to continue as we approach Christmas and carry on to the new year, with more people taking advantage of sales periods," Mr Lum added.

Top 10 – spend by industry

October

November

December (as at 10 December)

"Retail, personal services, and travel experienced the most notable growth during the October – December period. Personal services, such as beauty parlours and hairdressers, saw 26% growth in October, with providers grappling to keep up with demand as consumers flocked back to the salon. The lockdown was hard on many of us, and Australians were clearly keen to find some normalcy and take some time out for themselves as we reopened," Mr Lum said. "As we enter the festive season with increased freedoms, it's not surprising to see a continued rise in spending on dining, travel, and retail and we expect this positive growth to continue."

Credit cards continue to be a preferred payments method

"November saw a 50% rise in credit card acquisitions compared to October, demonstrating that credit cards continue to be a trusted and preferred payments method for consumers," Mr Lum said. "As credit card providers, in an increasingly competitive marketplace, we need to ensure we stay hyper-relevant to consumers and provide products that add real value and perks. For example, we have recently added complimentary mobile phone insurance to our rewards credit card and are sending out regular offers, such as discounts on streaming services or food delivery, to make sure our rewards credit cards are doing just that – rewarding consumers and catering to new spending behaviours."

What's next?

"With Christmas only four sleeps away, we continue to see strong card spend. With Queensland and Tasmanian borders reopening and school holidays in full swing, we anticipate that positive consumer sentiment will continue to rise as families take the opportunity to relax, reconnect, and explore regional and interstate areas. However, it remains to be seen if new COVID-19 variants and the rise in case numbers will extend restrictions in some states, which may result in a decrease in spending," Mr Lum concluded.