Kiwis splurging on credit cards

New Zealanders racked up more on their credit cards in January with increased purchases of durable goods and big-ticket items.

Core retail spending on credit and debit cards rose a seasonally-adjusted 2.2 per cent in January, reversing the 1.7 per cent decline reported in December, Statistics New Zealand said. Including petrol and vehicle-related spending, purchases were up 1.8 per cent.

That was led by a 5.1 per cent lift in spending on durable goods, such as hardware, appliances, and furniture. Spending was up across all categories except fuel, which was down 0.5 per cent.

“Spending in the durables industry bounced back from the December 2018 month,” retail statistics manager Sue Chapman said in a statement. “A lag in processing of transactions may have contributed to the December and January movements.”

A number of retailers have given a fairly subdued assessment of the Christmas-New Year trading period. That is despite consumer confidence surveys remaining upbeat.

The data also shows more of those purchases were made on credit. Just over 54 per cent of January’s transactions were made on credit cards, the highest proportion since Stats NZ started tracking the breakdown in 2002. Calendar 2018 was also the first time credit card transactions were a bigger proportion of transactions than debit cards.

It follows on from Reserve Bank data last month showing 32.4 per cent of total credit limits were outstanding at the end of December, the highest proportion since the central bank started collecting that data more than a decade ago.

The card spending data shows total retail purchases rose $5.52 billion in January, up 3.5 per cent from a year earlier.

Spending on durable goods was up 6.2 per cent from a year earlier at $1.28b, while consumables rose 5 per cent to $2.04b.

Including services and nonretail industries, spending on electronic cards increased 4 per cent in January to $7.33b from a year earlier.