Credit card spending bounces back, finds Citi

Popular bank and credit card provider Citi is calling it “business as usual” as customer spending made a comeback in February. 

According to the bank’s recent Credit Card Index, the daily average spend last month spiked by 28%. This is after a 19% drop in January. 

“As anticipated, spend has increased significantly in February following January's holiday season spending hangover,” said Choong Yu Lum, head of credit cards at Citi Australia. 

“February’s 28% spike in daily spend has recovered of pre-COVID levels, indicating the new year is in full swing and consumers are making the most of a predominantly lockdown-free month.”

The numbers also revealed that Aussies are spending more on life administration, with less focus on leisure activities. In fact, Citi recorded a massive 80% increase in spending on Legal and Tax Services. 

Where are credit customers spending? Let’s break it down … 

There are a range of ways Citi credit card customers have been spending over the past month. 

Here are the top 10 categories: 

• Health and Medical: 10.73% 
• Supermarkets: 9.63% 
• Restaurants: 8.55%
• Household goods retailing: 7.83% 
• Business services: 6.75% 
• Sports and Hobby Stores: 6.72%
• Retail goods: 6.31% 
• Insurance: 5.92% 
• Legal and Tax Services: 5.91% 
• Education: 5.25%
  

“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,” Lum said. 

Top tips to spending responsibly with your credit card 

Have you been spending a little more on your credit card lately? There are plenty of positives to using your card in the right way, however if you don’t, you could spiral into some unnecessary debt. 

Check out Mozo’s top tips for using your credit card in a healthy and responsible way: 

• Avoid interest where you can: Some credit cards come with  interest-free days (usually 44 or 55), meaning any purchases you make within these days won’t accrue interest. So if you have a big purchase on the horizon - and you intend to use your credit card - make sure to make the transaction early in the statement period. This way you can take advantage of all the interest-free days. 
  

• Earn points on your purchases: If you have a rewards credit card, make sure you are shopping at places that can earn you points. It’s also worth noting that you may be able to snag bonus points for buying with a partner of your rewards program. Keep in mind though, it’s never a good idea to spend just for the sake of earning points - only purchase what you would normally. 
  

• Don’t max out your credit card: You must remember, the balance on your credit card is not your money - you have to pay it back. Maxing out your credit card may not only cause you a headache when it comes to paying down your debt, it can also have an affect on your credit rating.
  

RELATED ARTICLE: Rewards credit cards in 2021: Are they worth it without overseas travel?  

Considering switching to a credit card that suits your spending habits better? Check out the hot options below or jump over to our credit card comparison table for more.