LNP – Nov. credit card spend up as people loosen purse strings

Total outstanding card balance up by Rs.3.8bn; almost 9,000 new cards issued
Credit card spend, a proxy for the spending pattern of mostly the urban consumer, continued to gain more momentum in November, after a sharp upsurge recorded in October, which corresponded with the easing of virus-related restrictions.

According to the latest data, the total outstanding card balance climbed by a robust Rs.3,875 million in November, up from about Rs.3,400 million in October, as people loosen their purse strings.

Colombo restaurants were seen filled with patrons and occupancies both in city hotels and resorts recorded
significant improvements.

The consumer price data for both November and December reflected this phenomenon, as the prices rose for the restaurant and hotel category the most, the two becoming the highest contributors to the non-food inflation in December.

Banks also gave some irresistible deals on such hotel stays and durable goods,
as a precursor to the December season.

Meanwhile, spending on essentials and other household goods also rose during the last three months, as the retail chains had a hard time in replenishing their shelves, since the people increased their spending, despite the higher prices.

Many increased the size of their grocery baskets, due to the fear of shortages in certain items such as milk power and so on.

With the November surge, the total outstanding credit card balance for the first 11 months rose by Rs.10.8 billion to Rs.128.1 billion.

The November surge was also reflective of the robust growth record in the private sector credit in the same month, which rose by Rs.61 billion, from around Rs.35 billion in October.

Meanwhile, the banks in total had issued 8,820 new cards during November, bringing the total credit card base in the entire banking system to 1.9 million.