Australian credit card, or “fantastic plastic” as locals call it, ended its love affair in April as debt, spending, credit limits and the number of accounts tumble to new lows not seen in more than five years. Over the course of the past year Aussie’s have cut up at least nearly half a million credit cards.
For April Australians owed AU$51.0 billion in April, compared to AU$51.5 billion for March and AU$51.5 billion for April 2018, for an annual decline of 1.8%, according to figures released by the Reserve Bank of Australia.
The amount of purchases in April were flat compared one-year ago. Purchase dollar volume (PDV), or the amount of purchases charged to credit cards, decreased to AU$26.8 billion in April, compared to AU$27.0 billion in March and AU$26.8 billion for April 2018.
The number of credit and charge card accounts slipped 2.9% YOY (year-on-year) in April, compared to a 5.4% decline in March, and a 4.4% decrease in February. At end of April Australians held 15.78 million credit card accounts, compared to 15.80 million in the prior month, and compared to 16.25 million one-year ago, according to figures gathered by CardData.
Since April 2018 Australians have cut up 517,000 cards and closed 470,000 credit card accounts, dropping to lows of more than six years ago, according to analysis by RAM Research.
Cash dollar volume (CDV), or cash advances taken with a credit card, dropped 12.3% YOY in April, compared to a decline of 18.9% YOY in March, and a decrease of 20.8% in February. CDV posted at AU$644 million in April, compared to AU$614 million in March and AU$734 million for April 2018.
Australian Consumer Confidence
The weekly ANZ-Roy Morgan Australian Consumer Confidence index reveals 30% of Australians say they are “better off” in mid-June, compared to 32% in mid-May. About 23% of Aussies say they are “worse off over the same period, about the same as mid-May. However, improvements in sentiment toward current economic conditions were not strong enough to offset falls in the future sentiment of economic conditions.
Overall Australian Economy
The overall Australian economy has plunged to its slowest YOY growth since the second half of 2009. Discretionary household spending is down 1.8% from last year, but non-discretionary spending, i.e. electricity, gas, insurance and health, has edged up slightly. There is a consensus weak wage growth is a major culprit driving spending and credit card usage down, notes Robert McKinley, Senior Analyst for CardTrak, CardFlash and CardData.
Full Monthly Report on Australia Consumer Credit and Spending from CardData is Available for $99 Per Copy
Australian Consumer Credit Card Outstandings
Australian Consumer Credit Card Credit Limits
Australian Consumer Credit Card Purchase Volume
Australian Consumer Credit Card Cash Advance Volume
Australian Consumer Credit Card Gross Dollar Volume
Australian Consumer Credit/Charge Card Accounts
All Figures Released and Revised as of 06/18/19