June credit card spend up by about half a billion: Data

• Total outstanding credit card balance for June rises by Rs.465 mn after declining by Rs.1,894 mn in May

The credit card spenders swiped their cards more often than a month ago to keep the outstanding balance kicking after a decline in May. This indicates that consumers are becoming more confident about the economy than a few months ago that they re-open their pocket books for various things.

The latest data showed that the total outstanding credit card balance for June rising by Rs.465 million after declining by Rs.1,894 million in May.

This brought the total outstanding credit card balance by the end of the first six months of the year to Rs. 150.15 billion, or up by a cumulative Rs.2,152 million.
Last week showed that the Institute for Health Policy Sri Lanka measured consumer confidence index having hit an all-time high of 36 points.

This reflects that people are becoming increasingly more confident about their current and future economic wellbeing after two years of economic downturn caused by the foreign exchange shortage as the country is now seeing its pre-pandemic level of foreign inflows.

This helped to bring the prices down to less than 2 percent from about 70 percent in 2022 and the interest rates to less than 15 percent from over 30 percent. This compels the people to start spending more, even on credit as credit is becoming cheaper.

In May, the commercial banks shelled out Rs.61 billion in fresh credit to private firms and individuals.
Meanwhile, the banks are also juicing what they offer on their credit cards, making the card holders irresistible to not trying them out.

The offers on leisure packages, dining and other spending which make them able to be converting into medium term repayment plans later at attractive rates make the card holders to spend from cards more.
In any case, credit card spend is not a very good proxy for consumer spend in Sri Lanka as there are only less than two million cards in active.

Sri Lanka currently has 1,923, 503 cards active by the end of June, up 6,668 cards from May.
This is a sign that the banks have again started to actively promote their card portfolios after a two-year hiatus.