January spending takes a hit but things are looking up for 2022

woman sitting on her couch holding her credit card online shopping due to covid in January 2022

After record card spend at the end of 2021, The CommBank Household Spending Intentions Index fell 10% in January, with the biggest declines seen in credit card and debit card spending on retail, entertainment and household services.

CommBank creates the Household Spending Intentions Index through combined analysis of CBA payments data (Australia’s largest consumer spending data set - covering approximately 40% of payment transactions) and loan application information.

The Omicron variant outbreak was a key contributor to this drop, with a monthly decline during January. That said, most spending categories remain higher than in January 2021, with the exception of home buying, entertainment and communications, which remain lower than a year ago.

Retail fell 20.9% in January, after a number of months of improvement, due largely to seasonal factors, such as Black Friday and Christmas shopping. Despite the month-on-month fall, retail spending intentions are 4.4% higher than January 2021, showing that the recovery remains intact.

January 2022 entertainment spending overall was 18% lower than in January 2021, marked by declines in spending on bars and nightclubs, music stores, amusement parks, bowling alleys and art galleries - likely due to Omicron.

Household services spending weakened 14.4% in January 2022, after previous strong gains. The fall in January likely relates to a reluctance to have home visitors due to the spread of Omicron. Relative to January 2021, January this year saw spending increases on vets, child care, swimming pools and landscaping.

The Household Spending Intentions Index in January had returned to levels close to September 2021, during the Delta lockdowns, but CBA Chief Economist, Stephen Halmarick noted that in spite of this he expected a continued economic recovery.

“It is no surprise that spending intentions fell more than usual in January due to the spread of Omicron, with the biggest declines seen in the retail, entertainment and household services sectors,” he said.

“Despite this, the index remains 1.4% higher year on year, supporting our view that the economy continues to recover from the worst of the Covid-related slowdown.”

CommBank’s latest credit and debit card data ending 4 February shows a pick up in spending growth, suggesting consumer spending hit a low in early January and has been steadily improving since.

“We continue to expect the Australian economy to grow by close to 5% in 2022,” Halmarick said.

Top low rate credit cards - last updated 13 August 2022

Search promoted credit cards below or do a full Mozo database search . Advertiser disclosure
  • Virgin Money No Annual Fee Card

    Virgin Money No Annual Fee for the life of the card. 0% p.a. for 12 months on purchases (reverts to ongoing purchase rate) and balance transfers (reverts to cash advance rate).

    Purchase rate
    0% p.a. for 12 months then 18.99% p.a.
    Balance transfer rate
    0% p.a. for 12 months and then 20.99% p.a.
    Annual fee
    $0
    Details
  • Apply By 31 Oct 2022
    Westpac Low Rate - Cashback Offer

    Enjoy a super low rate of 13.74% with 55 days interest free plus up to $200 cashback - $50 cashback for each month you spend $1,000 or more on eligible purchases in the first 4 months from card approval. New Cards only. T&C's and exclusions apply.

    Purchase rate
    13.74% p.a.
    Balance transfer rate
    6.99% p.a. for 12 months and then 21.49% p.a. (1.00% balance transfer fee)
    Annual fee
    $59
    Details
  • Apply By 31 Aug 2022
    St.George Vertigo - Balance Transfer Offer

    0% p.a. for 32 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply.

    Purchase rate
    13.99% p.a.
    Balance transfer rate
    0% p.a. for 32 months and then 21.49% p.a.
    Annual fee
    $55 $0 in the first year
    Details
  • Virgin Money Virgin Australia Velocity Flyer Card - Balance Transfer Offer

    Get in the air with a $129 Virgin Australia Gift Voucher each year. 0% p.a. for 28 months on balance transfers.

    Purchase rate
    20.74% p.a.
    Balance transfer rate
    0% p.a. for 28 months and then 20.99% p.a.
    Annual fee
    $129 $0 in the first year
    Details
  • Mozo Expert Choice Badge
    American Express Low Rate Credit Card

    Competitive low rate with $0 Annual Fee. Offers Card Refund Cover and Card Purchase Cover. Customers need an annual income of $50,000 or more.

    Purchase rate
    8.99% p.a.
    Balance transfer rate
    No current offer
    Annual fee
    $0
    Details

^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.