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.
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Our top five spending categories
| December | % of spend | January | % of spend |
| 1. Supermarkets | 10.09% | 1. Supermarkets | 10.73% |
| 2. Household goods retailing | 8.71% | 2. Household goods retailing | 8.55% |
| 3. Business services | 6.43% | 3. Business services | 6.72% |
| 4. Retail goods | 5.59% | 4. Insurance | 6.31% |
| 5. Sports and hobby stores | 5.25% | 5. Health/Medical | 5.25% |
“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.
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