December is known as a period where people rack-up debt and overspend on credit cards, as holiday activities and gift buying set in.
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,” stated FNB.
“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,” added Chris Labuschagne, CEO of FNB Credit Card.
The division’s data further showed that, on average, clients who typically spend R6, 650 in credit during the year, increased their spend by as much as R1, 460 during the December period last year. This brought the average to 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,” FNB explained.
The other sector that usually sees a large increase is the luxury goods sector. “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,” added FNB.
Home spend, increased by 44% in December too, in comparison to the rest of the year. From an average of R281.2 million to R404 million, consumers typically take time out to make home renovations and 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,” stated Labuschagne.
The health and beauty sector sees an increase of 42%, from R158.9 million to R225.7million, and grocery bills also go up from an average of R919 million to R1.2 billion, constituting 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,” FNB highlighted.
The only recorded data from a category that experienced a significant drop, is the airline ticket industry. This dove by 25%—R292 million spent monthly during the year versus R220 million in December—as most South Africans are already at their holiday destinations, FNB iterated.
“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,” concluded Labuschagne.
