Standard Bank has revealed that it experienced a substantial 43% year-on-year increase in new credit card acquisitions over the past 12 months. This sharp rise is attributed to a combination of strategic initiatives undertaken by the bank and a marked increase in consumer appetite for credit facilities. The bank’s findings suggest that credit card usage patterns in South Africa are undergoing a notable transformation, driven by evolving consumer behaviour and shifts in payment preferences.
Key Takeaways
- Credit Cards Becoming Everyday Tools: Credit cards in South Africa are no longer used just for large purchases but have become primary payment methods for daily essentials like groceries, fuel, and clothing.
- Digital and Contactless Payments on the Rise: A growing number of credit card transactions are taking place online and via tap-and-go, with 76% of in-store purchases now contactless, reflecting a broader shift toward convenience and security.
- Spending Caution Amid Growth: Although credit card usage is up by 43%, the average transaction value has declined, indicating that consumers are becoming more price-conscious and managing their spending more carefully.
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Credit Cards Increasingly Used for Everyday Purchases
According to the bank’s internal data, South Africans are progressively opting to use credit cards as their main method of payment, particularly for routine and essential purchases. The data highlights that credit cards are no longer reserved solely for large, infrequent transactions. Instead, they are increasingly being used for items such as groceries, reflecting a trend towards integrating credit cards into daily financial management. This behavioural shift suggests that credit cards are becoming embedded in everyday household budgeting, reflecting a blurring of lines between transactional banking and short-term borrowing.
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Top Spending Categories Reflect Lifestyle Trends
An analysis of spending behaviour reveals that the five most common categories for credit card expenditure include groceries, dining out at restaurants, fuel purchases, department store shopping, and clothing retail. These categories reflect both essential and discretionary spending habits, indicating a balanced use of credit facilities among cardholders. The rise in discretionary spend, such as restaurants and clothing, points to a growing middle-class comfort with credit usage, while the dominance of essentials like groceries and fuel reflects the economic stress many households are managing.
Credit Cards Used More as Primary Transaction Tools
Although rising credit card usage might initially raise concerns about growing personal debt, it is suggested that this is not necessarily the case. Many customers now treat their credit cards as primary transaction accounts, using them not only to manage daily expenses but also to benefit from loyalty programmes and credit-building opportunities. Instead of reserving credit for emergencies or high-value purchases, consumers are using their cards to earn rewards and demonstrate responsible financial behaviour. This trend is particularly strong among younger, urban customers who value tech-savvy banking tools and instant rewards, and who are more likely to manage their financial lives from mobile devices.
Card Limits Remain Stable Despite Growing Uptake
Despite the surge in credit card adoption, the bank notes that average credit limits have remained steady over time. This suggests that consumers are still cautious when it comes to overextending themselves and prefer to keep their credit exposure within manageable limits. While Standard Bank continues to encourage responsible borrowing, it has also prioritised streamlining the process for credit limit increases via its digital banking platforms, particularly for existing clients seeking greater flexibility. The flat average limit also reflects tighter lending conditions across the financial sector, where risk profiling and income verification remain central to credit decisions, even amid aggressive growth strategies.
Shift from Cheque to Credit for Daily Spending
There has been a noticeable behavioural shift among clients who possess both cheque and credit cards. A growing proportion of these customers are now choosing to make the majority of their purchases using their credit cards instead of their cheque cards. The bank indicates that 30% of credit card users conduct more than half of their transactions on credit, while a further 11% rely exclusively on credit cards, using them for all of their spending needs. This indicates a broader transition away from traditional debit-based banking, signalling that consumers increasingly see credit cards not as debt instruments but as flexible financial tools.
Credit Cards Offer Added Value Through Rewards and Perks
Customers appear to be drawn to the added value offered by credit card usage, particularly through rewards programmes and exclusive benefits. Features such as uCount Rewards, airport lounge access, and lifestyle perks make credit cards a preferred option for consumers looking to maximise the return on their spending. These benefits contribute to the growing appeal of credit cards as comprehensive financial tools, rather than simple borrowing instruments.
As competition intensifies in South Africa’s banking sector, loyalty programmes have become a key battleground—offering tangible perks has become just as important as interest rates in attracting and retaining cardholders.
Managing Cash Flow Through Strategic Credit Usage
Credit cards are also being used as a tool for cash flow management, especially by customers who wish to benefit from interest-free payment periods. By using their cards strategically, consumers are able to align their spending with billing cycles and payment due dates, helping them to make the most of available funds while avoiding unnecessary interest charges. For financially savvy users, this has created a new kind of credit behaviour—where short-term debt is avoided entirely through disciplined repayment within the interest-free window, turning credit cards into high-reward, zero-cost payment instruments.
Although the number of credit card users is growing, it is observed that the average transaction value has declined, indicating a more conservative approach to spending. Consumers are becoming increasingly price-sensitive, likely in response to broader economic pressures. This trend is supported by the fact that customers are choosing to make more frequent, lower-value purchases, reflecting a desire to control household budgets more carefully. The dip in average spend per transaction may also point to increasing financial strain, where consumers are forced to prioritise necessities and break purchases into smaller, more manageable amounts.
Digital Wallets and Contactless Payments on the Rise
There has also been a significant shift in how credit cards are being used. A growing percentage of transactions—currently 26%—take place online, reflecting the continued rise of e-commerce across South Africa. At the same time, in-store spending has also changed, with 76% of all card transactions now processed using contactless technology. This increase in tap-and-go payments highlights consumer preferences for faster, safer, and more convenient ways to make purchases.
The explosion of digital and contactless payments has accelerated due to smartphone penetration, the rollout of NFC terminals, and a growing cultural preference for frictionless, queue-free retail experiences.
Spending volumes continue to fluctuate seasonally, with noticeable increases between March and May, largely driven by public holidays, the Easter break, and school closures. However, the most prominent spike in card activity occurs in the final two months of the year. The Black Friday retail period in November, followed by festive season shopping in December, results in a significant boost in credit card usage. Consumers often plan their budgets and purchases around these promotional events, leading to sustained high transaction volumes during this time. Retailers have also responded by synchronising promotional calendars with expected spikes, reinforcing the cycle and making seasonal spending patterns even more predictable—and lucrative—for banks and merchants alike.
Economic Outlook May Influence Future Spending Trends
Looking ahead, Standard Bank anticipates that recent interest rate cuts implemented in November 2024 and January 2025 may provide some financial relief for households. These changes could lead to a rebound in spending activity, particularly if inflation remains in check and consumer confidence improves. While financial pressures have led to more cautious purchasing decisions, the combination of rewards, security, and digital convenience continues to support credit cards as a central financial tool for many South Africans.
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Conclusion
Data highlights a fundamental shift in how South Africans are using credit cards—moving beyond traditional borrowing to incorporate them into everyday money management. With a rise in digital and contactless payments, greater use of reward programmes, and strategic spending habits, credit cards are evolving into multifunctional tools for both convenience and financial planning. However, the underlying caution in transaction values suggests that while usage is up, consumers remain mindful of economic pressures and are spending more deliberately.
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