Australians increasingly are using debit cards more than credit cards in an economy that has begun recovering from a financial crisis that begun in late 2008, analysts say and government data show.
Debit card use among Australians in February grew by 13.1%, to 161 million purchase transactions from 142.4 million during the same month last year, data from the Reserve Bank of Australia reveal. Debit card sales volume grew by 10.3%, to AU$10.7 billion (US$9.9 billion or 7.5 billion euros) from AU$9.7 billion, while the number of debit cards in circulation grew by 9.2%, to 32 million from 29.3 million.
Australian credit and charge card holders in February initiated 118.1 million purchases, up by 6.2% from 111.2 million during the same month last year. Sales volume grew by 6.4%, to AU$18.2 billion from AU$17.1 billion, signaling a slow rise in credit card use, unlike last year when it displayed negative growth.
Card-cash advances continued to decline, falling by 7%, to AU$896 million from AU$963 million, according to the bank. This continues a decline trend as customers shun advances that incur added fees. Repayments toward credit and charge cards, however, rose 5.4%, to AU$17.7 billion from AU$16.8 billion, as cardholders continued to reduce their card debt.
Credit card outstandings totaled AU$47.1 billion at the end of February, up 5.1% from AU$44.8 billion a year earlier, the data show. The number of credit cards on issue grew by 2.1%, to 14.2 million from 14.5 million.
The higher rate of growth in debit card use is not surprising given that the overall economy is still recovering and “people are still trying to pay down expensive debt,” Matthew Sinclair, executive director of Australia-based Carpadium Consulting, tells PaymentsSource.
Sinclair has indicated in the past that he expects the average Australian to continue to shun credit card use after the experience they had with card debt during and after the economic slowdown.