Credit card spend slides in November as virus fears cut consumption

• Total outstanding credit card balance declines to Rs.114.1bn from Rs.115.6bn in Oct.

Credit card spend continued to slide for the fourth consecutive month in November as the virus scare continued to haunt people’s lives from going about their normal consumption patterns from shopping trips to dining outs to holidaying.  

The total outstanding credit card debt slipped to Rs.114.1 billion in November from Rs.115.6 billion in October, continuing a slide, which began in August. 

Sri Lanka had a total outstanding credit card balance of Rs.121.489 billion by the end of 2019.  The total outstanding credit card debt in the system is a distant gauge for the credit card spend and the overall consumption expenditure, but is not an outright measurement of the two as still a large swath of transactions take place using physical cash. 

But fears over contracting COVID-19 through notes and coins have compelled people to explore electronic cash methods including credit cards.

Mirroring this phenomenon, people signing up for new cards grew till October before falling slightly in November in an aberration, which doesn’t seem to harm the overall trend. 

The number of Sri Lanka’s total active credit cards rose from 1,829,927 in December 2019 to 1,888, 605 in October, an increase of 59,000 cards before falling to 1,887, 474 in November. 

Banks are seen carrying out aggressive sales campaigns to sell cards, as credit cards are one of the most lucrative businesses for banks to make money via interest income and other fees.