Credit, debit card spending ticking up

(Australian Associated Press)

 

Credit and debit card spending picked up modestly last week, with an increase in in-store spending outweighing an easing of online sales as more stores reopened, Commonwealth Bank says.

“Spending on goods has consolidated at an elevated level, while spending on services has picked up, albeit from very low levels,” the bank said on Tuesday.

Total retail expenditure is strong primarily because of food retailing – primarily at supermarkets – which had plateaued at an elevated level, CBA said.

Spending on drinking at hotels, pubs and bars is ticking upwards but still down from this time a year ago.

Personal care spending has accelerated quickly in the past month, from very low levels.

In a separate report, CBA said home buying intentions stabilised in May following a big decline in April, especially for owner-occupiers locking in low fixed-rate mortgages.

Motor vehicle spending intentional continued to trend down in May, CBA said in a report that combined household data measures with Google Trends search terms to measure household buying intentions.

Separately, Zip Co released figures based on spending for 1.8 million of customers showing that ATM usage was still down 43 per cent in May as the coronavirus crisis accelerated the transition to a cashless society.

“At this rate, it’s not unreasonable to consider Australia could be almost cashless by 2021,” Zip co-founder and chief operations officer Peter Gray said.

The Zip Weekly Spending Index showed spending on gyms and fitness centres was down 81 per cent in May, compared with a year ago, while spending on security and safety system installations rose 133 per cent.

Consumers also spent significantly more on roofing, gardening, outdoor home improvement and home pools and spas, Zip said.

The reopening of beaches saw more spending on ice cream during the week of May 11, with sales more than double what they were the previous year, despite similar weather.

“Surf schools were uncharacteristically popular during the coldest months of autumn, with consumers spending double what they usually would during May in 2020 compared to 2019,” Zip said.

 

With the reported rise in credit and debit card spending not unforseeable given the events of recent months, its important to be conscious about your total level of expenditure, and not fall into the trap of accumulating excessive credit card debt. With the relative ease of online shopping, expenditure can quickly get away from you. To avoid this, be aware of your discretionary spending habits, take stock of how much conveniences are costing you,  and take the time to set yourself up a  budget.

financial planner can help you explore ways to make the most of every area of your finances. If you would like to know more, feel that you or anyone you know requires advice, or would simply like a review of your financial situation, please visit our contact page call our office today to arrange an appointment on (07) 5574 0667.

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