Active credit card count hits ten year low
(13 November 2019 – Australia) The number of active Australian credit cards has slumped to its lowest level in a decade according to the latest Reserve Bank of Australia (RBA) payments data resulting in a significant slide in active credit card account numbers to 13.9 million as of Q3 2019.
Active credit cards have declined by 6.4 percent year-on-year from 14.8 million in Q3 2018, perpetuating a long running downtrend in credit card activity also confirmed as part of East & Partners Merchant Payments program tracking an ongoing conversion from credit to debit by Australian consumers in addition to more merchants applying a surcharge yet surcharging a lower rate on average.
From Q3 2015 to Q1 2018 credit card figures consistently exceeded 15 million, peaking at 15.5 million in June 2017. Since that peak credit card numbers have fallen by ten as a result of growing buy now pay later (BNPL) use, regulatory changes and stagnant retail spending growth.
AfterPay announced that October has been its largest ever month for new customers, with 15,000 being added each day and 9,000 of those in the US. AfterPay is planning to expand into new markets such as Europe and Canada and recently announced deals with eBay and MasterCard to lift customer and merchant numbers.
It has also been mooted that customers are paying down credit card debt and reducing their credit limit due to tightening mortgage lending standards however total credit limits have contracted by only one percent year-on-year to A$9,800.
“One in three Australians are planning to spend less on gifts than they did last year, with a further 54 percent expecting to spend about the same. Just 11 percent of consumers are planning to spend more this year. The mix is almost identical to last year and suggests we are heading for another lacklustre Christmas spend” stated Westpac Chief Economist Bill Evans.