Credit card spending in Kuwait rises 12.6% to hit KD 3.4 billion

• In the first nine months of 2024, 63.5% of credit card spending was domestic, totaling KD 2.18 billion, while 36.5% was international, amounting to KD 1.24 billion.

• Total automatic withdrawal transactions using credit cards in the first nine months of 2024 amounted to around KD 442.9 million, compared to KD 396.6 million for the same period in 2023, reflecting an annual growth of 11.6%.

• Electronic transactions made with credit cards online totaled KD 1.15 billion in the first nine months of 2024, up from KD 993 million during the same period last year, marking a growth of 15.8%.

Expenditure by citizens and residents through credit cards increased by 12.6% in the first nine months of this year, reaching KD 3.43 billion, up from KD 3 billion during the same period in 2023, a rise of KD 385.2 million. This growth reflects the continued preference for credit cards, particularly for online purchases abroad and increasing international travel. Kuwaiti banks offer numerous benefits, such as rewards programs and point refunds, which further incentivize the use of credit cards for purchases and cash withdrawals, according to Al Anbanewspaper.

Data from the Central Bank of Kuwait revealed that spending through credit cards during this period was split between domestic and international transactions. Domestic spending accounted for 63.5% of the total, amounting to KD 2.18 billion, while international spending represented 36.5%, totaling KD 1.24 billion.

Point-of-sale transactions

The data monitors spending across three categories: point-of-sale (POS) transactions, ATM withdrawals, and online transactions. Total spending in the first quarter (January to March) reached one billion dinars, rising to KD 1.1 billion in the second quarter (April to June). In the third quarter (July to September), spending surged to KD 1.26 billion.

Regarding POS transactions, the total value for the first nine months of this year reached approximately KD 1.8 billion, a 9% increase from KD 1.65 billion during the same period last year. These transactions were divided into KD 1.2 billion inside Kuwait and KD 554.7 million abroad, reflecting a notable rise in international spending, which aligns with the increase in travel and tourism activities.

Automatic withdrawal transactions

Total automatic withdrawal transactions using credit cards in the first nine months of 2024 amounted to approximately KD 442.9 million, compared to KD 396.6 million for the same period in 2023, reflecting an annual growth of 11.6%. These transactions were split between KD 411 million inside Kuwait and KD 32 million abroad, highlighting the increased demand for cash withdrawals using credit cards locally.

Increase in electronic transactions

Electronic transactions made with credit cards online totaled KD 1.15 billion during the mentioned period, up from KD 993 million during the same period last year, marking a growth of 15.8%. These transactions were divided into KD 501.7 million inside Kuwait and KD 655.7 million outside, indicating the growing reliance on electronic cards for international purchases.

With the rise in global interest rates this year, cash transactions with credit cards now face additional costs. Cash withdrawals result in the cardholder incurring cumulative interest based on the repayment period, increasing the financial burden on customers, particularly as banks continue to raise interest rates. This situation has led to increased caution among consumers regarding cash withdrawals with credit cards.

Advantages of credit cards

Credit cards are a key financial tool that offers many benefits to their holders, making them the preferred choice for citizens and residents:

• Easy electronic payments: Credit cards enable holders to make electronic payments quickly and easily both at home and abroad.
• Security and protection: Banks provide high levels of security, including smart chip technology and two-factor authentication features.
• Rewards programs and promotions: Credit cards offer rewards such as points redemption, cash back, and exclusive offers for cardholders, including discounts on travel, hotels, restaurants, and shopping.
• Interest-free installments: This option provides consumers with greater financial flexibility, allowing them to manage costs over longer periods without incurring interest.
• International coverage and ease of use: Credit cards are accepted worldwide, making it easier for travelers to conduct transactions without the need to carry large amounts of cash.