Credit card spending falls in January but bounce back expected


During the height of the Covid-19 pandemic, credit card spending had reached a plateau. But according to new research from Citi, Aussies across the country are slowly getting back into the swing of things. 

The credit card issuer found that although credit card spending had fallen by 19% in January, spending in December was almost at pre-Covid levels. 

“Consumers are experiencing a spending hangover, after doing their bit to boost the economy during the November and December silly season,” said Head of Credit Cards at Citi Australia, Choong Yu Lum. 

“This is in line with expected spend for January, as consumers typically tighten their belt following a period of increased spending due to Christmas and school holidays.”

And according to Citi, what we’re using our plastic for has also changed between December and January. 

Credit card spending to pick up as Christmas nears, says Citi

Our top five spending categories

December% of spendJanuary% of spend
1. Supermarkets10.09%1. Supermarkets10.73%
2. Household goods retailing8.71%2. Household goods retailing8.55%
3. Business services6.43%3. Business services6.72%
4. Retail goods5.59%4. Insurance6.31%
5. Sports and hobby stores5.25%5. Health/Medical5.25%

“It’s interesting to see the clear shift in consumer behaviour between December and January, as Australians go from ‘fun mode’, with high spending in the ‘retail goods’ and ‘sports and hobby stores’ categories, to organisation mode with ‘insurance’ and ‘health and medical’ spend categories ranking higher,” Mr Lum said.

Pandemic paused credit card spending

Over the last few months, New South Wales and Queensland have had their share Covid-19 lockdowns. As a result, Citi saw a correlation between lockdown and a reduction in spending. 

For instance in NSW, lockdown spending fell by 14% in the first week compared to the week prior, while spending in QLD dropped by 13% week on week. 

Despite this, Citi is forecasting a jump in spending over February. 

“With lockdowns in NSW and QLD demonstrating some uncertainty, it is pleasing that we still saw strong spending growth in December. While spend has dipped in January, we anticipate February spend will increase,” said Lum. 

If you’re in the market for a new piece of plastic, head on over to our credit card comparison tool or get started with the offers below.

^See information about the Mozo Experts Choice Credit Card Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.