Card spending dipped last week but monthly spend still up 14%

Total spending on credit and debit cards last week fell by 1 per cent, or €22 million, when compared to the previous week, but spending for the month of September is still up considerably on the same month last year, the latest data from the Central Bank shows.

The high-frequency daily credit and debit data from the regulator captures expenditure of euro-denominated credit and debit cards issued to Irish residents.

The dataset consists of total daily debit and credit card spending and ATM withdrawals. From October 2020, expenditure in a number of key sectors of the economy, and a split of online and in-store spending is also available.

The data shows spending in the first three weeks of September was 14 per cent, or €610 million, higher than the same period in September 2020.

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Spending in the transport sector increased by 9 per cent week-on-week, while non-grocery retail spending was 1 per cent higher. All other sub sectors fell last week in comparison to the previous week.

Managing debt

Separately, Bank of Ireland has published the initial results of a campaign to "help customers reduce long-term credit card debt".

Earlier this year, the bank contacted about 9,500 customers who were making only minimum payments on their credit cards over a 12-month period – and therefore paying credit card interest every month – to suggest alternative ways to manage their debt.

Advice offered included paying more than the monthly minimum payments, making once-off payments to reduce their balance where possible, or even switching to a personal loan with a lower interest rate.

Bank of Ireland said customers who received targeted advice on reducing their long-term credit card debt were twice as likely to improve their finances.

Analysis conducted to date on the half of the group who the bank got in touch with shows that 22 per cent of customers took corrective action by reducing their credit card balances or making a once-off repayment of at least 10 per cent of the balance.

This compares with only 11 per cent of customers in the control group who received no communication.

Research carried out by Bank of Ireland as part of the campaign revealed that nine in 10 credit card customers are aware that it is expensive to only pay off a small part of their monthly bill but most (80 per cent) didn’t know the interest rate on their card.

Gavin Kelly, retail Ireland chief executive with Bank of Ireland, said: “Managing your cards properly is a key driver of financial wellbeing.

“That is why we have zoned in on customers who are only paying the minimum off their credit card each month, which can impact their financial wellbeing in the long run.

“The change we have seen in some customers contacted as part of this campaign is very encouraging, but we recognise that this is only a start. We will take the learnings from this campaign and increase our efforts in persuading others who may be struggling with long-term debt to take action.

“The campaign has demonstrated that practical nudges and guidance can change the habits of some customers who may be unsure of how to manage their credit card debt effectively.”