Consumers Expected to Spend Over 20% More on Their Credit Cards This December
Consistently there is a trend of consumers spending far more on their credit cards over the December period than during the average month in the year.
According to FNB Credit Card, credit card customers spent a total of R6.7 billion over the December period last year, a 22% increase when compared to the rest of the year. The largest increases in spend were on entertainment followed by luxury goods and then home spending.
“We looked at our entire database, and took into account the average spend from January to November last year, and the relative increase seen in December 2015, to give an indication of how much more customers may expect to spend over this festive season,” says Chris Labuschagne, CEO of FNB Credit Card.
FNB Credit Card data shows that, on average, customers who usually spend R6 650 on their card during the year increased their spend by R1 460 in December 2015 to an average of R8 100 per customer.
The biggest jump of 52% is seen in the entertainment category, which went from an average of R447 million, up by R234 million, to a total of R681 million spent in December. Entertainment includes restaurants, liquor stores, tickets for theatre and events, as well as sport.
Another large increase is seen in luxury goods. Consumers spend 51% more at toy, clothing, electronic and jewellery stores during December compared to the rest of the year. Average spend in this category increases from R241 million to R365 million, during this time.
Interestingly, home spend—which is spend at furniture, hardware and garden stores—increased by 44% in December when compared to the rest of the year, from an average of R281.2 million to R404 million, as consumers take time out to make home improvements.
“Our customers spent on average R350 per month on items for their homes during the year and this went up to R485 in December 2015,” says Labuschagne.
Health and beauty sees an increase of 42%, from R158.9 million to R225.7million, and grocery bills go up from an average of R919 million to R1.2 billion, an increase of 40%.
Although South Africans are not travelling to work every day, there is still a 12% increase in petrol for the period as families travel to holiday destinations.
The only category that sees a significant decrease is spend on airline tickets, which dives by 25%—R292 million spent monthly during the year versus R220 million in December—as most South Africans are already at their holiday destinations.
“While the festive season is a great time to enjoy with family and friends, make sure that you don’t stretch your spending beyond what you are able to pay back,” concludes Labuschagne.