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Success for the interest rate policy? Spend more on credit, less in cash - voila! Of money

2023-03-08T10:07:43.751Z


In February 2023, we spent an amount of NIS 35.055 billion on credit cards - an increase of more than 10% compared to February 2022, online purchases grew by 10.1% in February to 20.576 billion


The blessed rains of February.

Did they also contribute to the decrease in cash expenses, or is it the economic situation that pushes us to pay on credit? (Photo: ShutterStock)

Is the interest rate policy starting to curb our spending, which may lead, at least to the hopes of the Bank of Israel, to contain inflation?

Or is it a random figure based (for example) on seasonal phenomena, such as the rains that finally fell during the month of February and left the Israelis at home?



Either way, in February 2023 we spent an amount of NIS 35.055 billion on credit cards - an increase of more than 10% compared to February 2022, online purchases grew by 10.1% in February to NIS 20.576 billion, which is 58.7% of the expenses.



According to data from Sheba (Automated Bank Services), the manager of the national credit card payment system, in February 2023 the growth trend in credit card spending by the Israeli public strengthened, and they amounted to NIS 35.055 billion, a figure that represents an increase of 10.1% compared to credit card spending in February 2022 which amounted to NIS 31.847 billion.



The daily spending on credit cards in February this year stood at NIS 1.252 billion, a decrease of 1.2% compared to January 2023 in which the daily spending (it should be taken into account that the daily result analysis eliminates the differences in the effects of the number of days in the month between January and February) stood at NIS 1.267 billion.

The average daily expenditure increased in February this year by more than NIS 115 million compared to February 2022 when the average daily expenditure amounted to NIS 1.137 billion.



It also appears from Sheba's data that in February 2023 significant increases in expenses were also recorded in transactions in the businesses and in online transactions.

The increase registered in expenses in online transactions amounting to NIS 1.88 billion and at a rate of 10.1% compared to February last year.



Purchases in online transactions totaled NIS 20.576 billion compared to an amount of NIS 18.688 billion in February 2022. The average daily spending in online transactions in February this year was NIS 734.861 million.



This is a decrease of 3.3% compared to January 2023 when the average daily expenditure on online purchases was NIS 760.177 million.

The volume of purchases in physical transactions, carried out in the businesses themselves using credit cards and digital wallets, increased by NIS 1.32 billion and at a rate of 10% and stood at NIS 14.479 billion in February compared to NIS 13.159 billion in February 2022. The average daily expenditure in physical transactions in February was NIS 511.118 million



, An increase of 1.9% compared to January 2023 when the amount of daily expenses in physical transactions was NIS 507.496 million.



The volume of daily cash withdrawals from bank ATMs increased in February 2023 to the extent of NIS 85 million and at a rate of 1.9% compared to February 2022. In February of this year, cash withdrawals from ATMs amounted to NIS 4.716 billion compared to NIS 4.631 billion in February last year.



The average daily cash withdrawals in February 2023 was NIS 168.421 million, a figure that represents a decrease of 0.3% compared to January 2023 when the average daily cash withdrawals from bank ATMs were NIS 168.901 million.

VP of Sheba, Tali Hollenberg (Photo: Reot Ashkenazi)

Whether the decrease in daily spending shows the success of the Bank of Israel's interest rate policy, which is designed to suppress inflation, or vice versa: signals the continuation of price increases, it is still too early to know.



In any case, it should be taken into account that February 2023 was the first and perhaps even the only month in which large amounts of rain fell, with a number of really rainy days, a fact that usually pushes in the direction of online transactions with credit cards compared to spending in cash at businesses.



VP of Sheba, Tali Hollenberg

: "The Israeli public opened the year 2023 by continuing to strengthen the trend of a significant increase in spending on credit cards.

We estimate that there is a shift of the public to credit card purchases over the current expenses that are made through checks and cash.



The significant increase in credit card spending can be attributed to two processes - the adoption of technology and the fact that digital wallets have become a substitute for cash, and on the other hand, to the fact that paying by credit card, which allows deferred purchases through payments or credit, allows the public to better deal with price increases in the economy."

  • Of money

  • our money

Tags

  • credit cards

  • cash

  • inflation

  • interest

  • rain

Source: walla

All business articles on 2023-03-08

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