Dining out fuels credit card use
Dining out boosts credit card spending
Drinks and dinners out were the main reason we spent slightly more on our credit cards last month.
Kiwis upped their use of credit cards by 0.5% when it came to everyday purchases during July with money spent at bars, cafes, and restaurants and on takeaways fuelling the rise.
But a bigger measure of spending that includes the value of car and vehicle-related spending was flat – up just 0.2% - according to Statistics New Zealand.
The value of transactions in the hospitality industry alone was up 1.5 percent in July, continuing steady gains made since March.
Fuel sales fell 1.4% after falling 3.7% in June and 4.6% in May.
Statistics New Zealand data reveals the value of credit card transactions have been on the rise since January 2009, accelerating since December 2010.
Investment bank J.P Morgan said the strength in consumer spending was surprising in the wake of the string of earthquakes to hit Canterbury earlier this year.
“While record low interest rates and a pick up in employment and wage growth have underpinned spending, we suspect that consumers will tighten their purse strings in the near-term,” said J.P Morgan analyst Helen Kevan.
Financial market volatility was likely to curb consumer spending but the bigger brake in the near-term was likely to be the threat of rising interest rates – although that was less certain following sharp declines in global equity markets.
“While we currently forecast the next official cash rate hike in September, the timing of the next policy move is heavily conditional on a normalisation in market sentiment, and ebbing of risks around the US and Euro area fiscal situation.”
Georgina Bond
Tue, 09 Aug 2011
Tue, 09 Aug 2011
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Dining out fuels credit card use
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