Consumer Payment Card News

Fantastic Plastic Not So Fantastic as Aussies Chop Up Credit Cards

Australians are cutting up their fantastic plastic to the tune of 66,000 credit cards per month. In December Aussies closed 60,000 credit card accounts, totally 790,000 over the course of 2018.

Australians Cut Up Fantastic Plastic Credit Cards

Additionally, credit card debt and cash advances on fantastic plastic declined again in December, declining in each month of 2018.

The amount Australians owe declined 1.9% year-on-year (YOY) in December, compared to a YOY decline of 0.2% in November, according to data released today by the Reserve Bank of Australia.

The amount of purchases slipped 1.2% YOY in December, compared to a 1.0% YOY drop in the prior month, according to figures collected by CardData.

Australian Debt & Economy

Analysis by RAM Research reveals the average credit card balance per account has edged up from AU$3168 one-year ago to AU$3262 for December 2018. The average amount of purchases made with a credit card rose slightly to AU$1816 per account for December 2018, compared to AU$1719 for December 2017.

The weekly ANZ-Roy Morgan Australian Consumer Confidence index notes 33% of Australians says they are “better off” in mid-February, compared to 31% in early January. About 25% of Aussies say they are “worse off over the same period. However, improvements in sentiment toward current economic conditions were not strong enough to offset falls in the future sentiment of economic conditions.

Australian Consumer Credit

Australian credit card outstandings, or debt, declined 1.9% YOY to AU$51.9 billion in December, compared to AU$52.1 billion for November and AU$52.9 billion for December 2017.

Australian credit card credit limits, declined 1.2% YOY to AU$151.7 billion in December, compared to AU$151.9 billion for November, and AU$153.6 billion for December 2017.

Australian Credit Card Usage

Purchase dollar volume (PDV), or the amount of purchases charged to credit cards, decreased 0.7% YOY in December to AU$28.9 billion. For November, credit card PDV reported as AU$28.5 billion and for December 2017 posted as AU$28.7 billion.

Meanwhile, cash dollar volume (CDV), or cash advances taken with a credit card, dropped 10.9% YOY to AU$654 million in December, compared to AU$680 million in November and AU$734 million for December 2017.

Overall, Australian credit card gross dollar volume (GDV), or the sum of PDV and CDV, rose 0.3% YOY in December, driven by the bump in PDV. For December GDV was AU$29.5 billion, compared to AU$29.2 billion in November, and AU$29.4 billion for December 2017.

The number of credit and charge card accounts edged down 4.7% YOY in December to 15.91 million, compared to 15.97 million in the prior month, and compared to 16.70 million one-year ago.

Compared to U.K. and U.S.A.

British credit card lending noses down a tad more. According to the latest consumer credit statistics released this morning by the Bank of England (BOE), annual consumer credit growth slowed to 6.6% in December, reflecting the continuation of relatively weak flows of new lending. The net monthly flow in December fell to £0.7 billion, reflecting less extra borrowing on credit cards.

Consumer revolving debt in the U.S., mostly credit card debt (95%), remained above the $1 trillion level for the sixth consecutive quarter. However, the year-over-year change in U.S. credit card debt, slowed dramatically in the last three months of 2018, from a revised 11.6% in October, to a revised 5.6% in November and 2.0% in December, according to CardTrak.

Australian Consumer Credit Card Outstandings

Dec 2016: AU$52.8 billion
Dec 2017: AU$52.9 billion
Dec 2018: AU$51.9 billion

Additional Current & Historical Monthly Australian Credit Card Outstandings

Australian Consumer Credit Card Credit Limits

Dec 2016: AU$151.1 billon
Dec 2017: AU$153.6 billion
Dec 2018: AU$151.7 billion

Additional Current & Historical Monthly Australian Credit Card Credit Limits

Australian Consumer Credit Card Purchase Volume

Dec 2016: AU$27.7 billion
Dec 2017: AU$28.7 billion
Dec 2018: AU$28.9 billion

Additional Current & Historical Monthly Australian Credit Card Purchase Volume

Australian Consumer Credit Card Cash Advances

Dec 2016: AU$758 million
Dec 2017: AU$734 million
Dec 2018: AU$654 million

Additional Current & Historical Monthly Australian Credit Card Cash Advances

Australian Consumer Credit Card Gross Dollar Volume

Dec 2016: AU$28.8 billion
Dec 2017: AU$29.4billion
Dec 2018: AU$29.5 billion

Additional Current & Historical Monthly Australian Credit Card Gross Volume

Australian Consumer Credit/Charge Card Accounts

Dec 2016: 16.69 million
Dec 2017: 16.70 million
Dec 2018: 15.91 million

Additional Current & Historical Monthly Australian Credit Card Accounts

Source: Reserve Bank of Australia; CardData; RAM Research: Bank of Enland; U.S. Federal Reserve