Consumer confidence is back, and Aussies are using their plastic again for travel, according to the latest data from Citi.
The latest Citi Australia Monthly Credit Index found that for March 2021, spend increased 23 per cent month-on-month. This increase in spending may be attributed to growing consumer confidence, as the economy continues to recover from the impacts of COVID-19.
In further signs of a more stable economy, Citi research also shows that year-on-year credit card spending is up 2 per cent.
Head of Credit Cards at Citi Australia, Choong Yu Lum said that this rebound post-Covid is a “pleasant surprise that speaks to the return of consumer confidence in the Australian economy.”
Last week, the Reserve Bank of Australia released its latest credit card figures, which indicated that in February 2021, $18.4 million was added to debt accruing interest. This has lifted the level of Australian credit card debt accruing interest to $20.03 billion.
As the Covid-19 vaccine rollout advances across Australia, and if consumer confidence continues to rise – particularly with thanks to Easter long weekend spending - we may see the rate of debt accruing interest continue to rise for Australian cardholders.
Credit cards unlocking Aussie travel
And speaking of spending, it appears the latest Covid-19 lifted restrictions have put travel back on the agenda for Australian cardholders.
Citi figures show that airline spend has improved 69 per cent, month-on-month. However, year-on-year, the level of spending on travel is still down 44 per cent.
As domestic travel restrictions ease across the country, and households welcome the Easter long weekend and/or school holidays, this increase may reflect our slow return to life pre-pandemic.
And thanks to the announcement of a trans-Tasman travel bubble between New Zealand as of 19 April, we may expect this level of spending to increase over the next month.
Top 10 - Spend By Industry – March 2021
|Category||Share of spend|
|Household good retailing||7.40%|
|Sports and Hobby Stores||4.27%|
|Hotels, Resorts and Spas||3.53%|
Source: City Australia Credit Card Index, March 2021.
Of these figures, Mr Lum said: “Notably this month, spend at restaurants increased 34%, perhaps reflecting Australians getting out to mark either end of term or Easter holiday celebrations.”
“While airline spend is still lower than usual, ranking 16th as a spend category, spend increased 69% compared to February indicating travel is gaining in popularity,” said Mr Lum.
Find your best travel card
Whether you’re dreaming of a skiing trip in Christchurch or planning a domestic family holiday, credit cards may help you on your journey.
While there is no one best credit card for travel on the market, there’s a range of frequent flyer credit cards on the market that could suit your financial needs and budget.
One of the most popular types of cards are frequent flyer cards, which allow you to earn frequent flyer points per dollar(s) spent on everyday purchases. These have the advantage of offering generous travel perks, such as concierge services, complimentary insurances and waived overseas spending fees.
Most significantly, the points you earn with these credit cards may be put towards flight upgrades, plane tickets and booking or upgrading accommodation. And there are a range of credit cards offering generous frequent flyer points bonuses on sign up right now.
RateCity data shows that there are 23 credit cards on the market offering bonus Qantas frequent flyer points on sign up, and 6 credit cards offering Virgin Velocity frequent flyer points on sign up.
Keep in mind that there is more to a credit card than a sign-up bonus. You’ll ideally want to compare the interest rate, fees, perks and rewards before applying.