KUWAIT CITY, June 10: Official data from the Central Bank of Kuwait reveals that credit card spending by citizens and residents surged by 11.24% in the first quarter of 2024, reaching a total of 1.051 billion dinars, compared to 945.2 million dinars during the same period in 2023. This increase reflects economic growth and improved consumer confidence.

Spending breakdown

Credit card expenditures were distributed as follows:

• Point-of-sale (POS) transactions: 552.1 million dinars (52.5% of total spending)
• ATM cash withdrawals: 144.6 million dinars (13.7% of total spending)
• Online transactions: 354.8 million dinars (33.7% of total spending)

POS transactions

Spending via POS devices saw a 7.8% year-on-year increase, amounting to 40 million dinars. Direct purchases within Kuwait rose by 12.98%, reaching 398.5 million dinars, up from 352.7 million dinars in the first quarter of 2023. This rise can be attributed to higher salaries, local market promotions, and inflation. However, direct purchases outside Kuwait declined by 3.5%, dropping to 153.6 million dinars from 159.2 million dinars.

Cash withdrawals

ATM transactions grew by 12.26%, increasing by 15.8 million dinars to 144.6 million dinars. Within Kuwait, cash withdrawals rose by 13.19% to 134.7 million dinars, compared to 119 million dinars in the same period last year. Abroad, cash withdrawals saw a slight increase of 1.02%, reaching 9.9 million dinars.

Online spending

Online transactions experienced a 16.5% increase, amounting to 50.3 million dinars. Online spending within Kuwait jumped by 22.5% to 156.8 million dinars, while online expenditures abroad rose by 12.18% to 198 million dinars. This growth indicates a shift towards e-commerce and digital services, influenced by changing consumer habits post-pandemic.

Foreign bank card spending

Spending via foreign bank cards totaled 170.1 million dinars in the first quarter of 2024, up 32.7% from 128.1 million dinars in the same period last year. POS transactions with foreign cards inside Kuwait grew by 39.2% to 139 million dinars. Cash withdrawals with foreign cards increased by 9.96%, totaling 30.9 million dinars.

Future trends

Based on the Central Bank of Kuwait's data, credit card spending is expected to continue growing, with an increased reliance on e-commerce. Financial institutions may need to enhance their digital infrastructure to support this trend. Local banks can develop strategies to encourage credit card usage through rewards, loyalty programs, and special offers.

Consumers should monitor their expenses and use credit cards wisely to avoid unnecessary debt.