Australian fantastic plastic, or what locals call credit cards, continued to decline across-the-board except for a little pick up in the amount of purchases in May. Consumer credit card outstandings continue on a downward spiral. Over the course of the past year Aussie’s have cut up at least nearly half a million credit cards, based on the number of open accounts.
Australians owed AU$51.0 billion in May, compared to a revised AU$51.0 billion for April and a revised AU$52.3 billion for May 2018, for a YOY (year-on-year) decline of 2.5%, compared to a 1.8% YOY decline the previous month, according to figures released by the Reserve Bank of Australia.
Australian Credit Card Spending
The amount of purchases in May dropped slightly (-0.3%) compared to one-year ago. Purchase dollar volume (PDV), or the amount of purchases charged to credit cards, decreased to AU$28.6 billion in May, compared to a revised AU$26.8 billion in April and a revised AU$28.7 billion for May 2018, according to CardData.
Cash dollar volume (CDV), or cash advances taken with a credit card, dropped 10.5% YOY in May, compared to a revised decline of 12.3% YOY decline in April. CDV posted at AU$657 million in May, compared to a revised AU$645 million in April and a revised AU$734 million for May 2018.
Australian Credit Cards-in-Force
Since May 2018 Australians have cut up 520,000 cards and closed 440,000 credit card accounts, dropping to lows of more than six years ago, according to analysis by RAM Research.
The number of credit and charge card accounts dipped 1.4% YOY in May, compared to a 2.9% YOY decline in April. At end of May Australians held 15.82 million credit card accounts, compared to a revised 15.78 million in the prior month, and compared to a revised 16.04 million one-year ago.
Australian Consumer Confidence
The weekly ANZ-Roy Morgan Australian Consumer Confidence index reveals 35% of Australians say they are “better off” in mid-July, compared to 34% in mid-June. About 24% of Aussies say they are “worse off over the same period, compared to 22% in Mid-June. However, improvements in sentiment toward current economic conditions were not strong enough to offset falls in the future sentiment of economic conditions.
The overall Australian economy has plunged to its slowest YOY growth since the second half of 2009 as discretionary household spending weakens. That June jobless rate remained at 5.2%, but only 500 new jobs were added for the month. Australia is largely (60%) of services basec economy. There is a consensus weak wage growth is a major culprit driving spending and credit card loan growth 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 Immediate Download
Monthly Statistic Charts with Analysis [2015-2019]
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 07/18/19