Coronavirus: Record fall for credit card spending in March, Reserve Bank says
Friday, 24 April 2020
New Zealand's credit card spending plummeted in March as the impact of Covid-19 hit.
The amount spent on cards in New Zealand in the month fell 9.1 per cent compared to February, to $3.7 billion, Reserve Bank statistics show.
The Reserve Bank said that was the largest monthly fall on record.
New Zealanders ended the month with $6.9b outstanding on their credit cards, down from $7.3b a month earlier.
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The amount charged to overseas-issued cards was down 22 per cent and the amount spent on local cards was down 7.2 per cent.
New Zealanders also spent significantly less internationally in the month – just $400 million was charged to New Zealand cards by overseas companies, down 25 per cent.
Infometrics economist Brad Olsen said, while March was a record, April's data was likely to show the lowest level of credit card spending in a long time, 'if not ever'.
Monthly electronic card transactions in New Zealand.
'Marketview data from the Paymark network shows that spending in over the first 16 days of April was down 57 per cent compared to the equivalent period a year earlier.
'March only included a few days of the lockdown period, and the days leading up to the lockdown actually saw a large boost in spending activity. In contrast, the lockdown has for almost the entire April month, meaning New Zealanders haven't been able to spend on anything but the essentials. I expect April spending figures will be dire. Only supermarket spending is showing any growth, up 3 per cent compared to a year earlier.'
He said there would be a short boost in spending when New Zealand shifted to alert level three next week but it would be short-lived.
NZIER principal economist Christina Leung said households would be cautious with their money because of uncertain economic conditions.
'Given bars and other entertainment establishments are still not allowed to open, there is only so much food people can eat.'