Credit card usage is making a resurgence compared to COVID-lows recorded this time last year, according to the latest Citi Australian Credit Card Index.
The research from Citi found that spend for April 2021 was 35 per cent higher than April 2020 at the beginning of the pandemic. This marks the third month in a row in which credit card spend was above COVID levels, indicating sustained economic recovery in Australia.
This increase in spending year-on-year aligns with the latest data from the Australian Prudential Regulation Authority ADI statistics for March 2021, which found that credit card lending grew by 1.3 per cent.
“April 2020 was the worst month for credit card spend in at least four years, and it’s exciting to see April 2021 tell a much more positive consumer story,” said Choong Yu Lum, Head of Credit Cards and Loans at Citi Australia.
“While we did record a slight drop in spend month-on-month, this is attributed to April typically being a quieter month as children head back to school and recreational activities slow down ahead of winter,” said Mr Lum.
Travel spend reaching new heights
Citi Australia also noted that rewards points redemptions increased in April 2021 by 6 per cent, particularly across travel categories and Velocity points.
This growth was attributed to eased travel restrictions domestically and internationally, including the trans-Tasman travel bubble between New Zealand as of 19 April.
Top 10 Spend by Industry – April 2021
|Category||Share of spend|
|Household good retailing||7.48%|
|Sports and Hobby Stores||4.30%|
|Hotels, Resorts and Spas||4.00%|
Source: City Australia Credit Card Index, April 2021.
“Resurging after a year’s lull are Travel and Airline categories: general travel and experience redemption was up 10 per cent, and Velocity points up 14 per cent,” said Mr Lum.
“It is another strong indication that our trans-Tasman travel bubble is working when it comes to stimulating spend on tourism. Additionally, we expect that increased domestic travel has contributed to this spike.”
If you’re daydreaming of your next holiday, a credit card that rewards you with travel perks and bonuses may be a helpful addition to your trip. RateCity data shows that there are currently 6 credit cards on the market offering bonus Virgin Velocity frequent flyer points on sign up.
Keep in mind that there is more to a credit card than its perks and rewards. You’ll ideally want to compare the interest rate and fees before applying.