Spending on credit cards and charge cards has crashed, diving by A$8.2 billion from March 2020 to $18.9 billion in April 2020, “with this being the lowest monthly spend since April 2011.”
Michael Ebstein from MWE Consulting painted a stark portrait of the drastic change in spending patterns and payments preferences in his monthly analysis of the RBA’s monthly data:
• balances dropped by a huge $5.2 billion from March to $41.5 billion in April;
• cash advances on card purchases in April 2020 were 47 per cent below April 2019, with purchases lower by 31 per cent; and
• total card spend was down by 32 per cent.
Ebstein noted “the falls in international cash and purchases were even more severe.
“The month-on-month falls were huge with debit impacted as well but to a lesser
extent.
“Whilst the 30 per cent month-on-month fall in card spend in Australia was large, it was not as great as the 46 per cent drop in New Zealand where the lockdown conditions were more severe.”
Looking at the data on a year-on-year change basis, Ebstein said:
• average annualised balances dropped to $48.7 billion to be back to the level of July 2011;
• average annualised accruing balances fell to $29,165 to be at the level of January 2008; and
• debit was less impacted by the lockdown and increased its share of value of spend to 51.3 per cent on a higher 71.8 per cent of the volume.