Kuwait’s credit card spending surges by 16.6% in 2023

Official data issued by the Central Bank of Kuwait revealed that total spending through credit cards during 2023 witnessed a growth of 16.6% to reach 4 billion dinars, compared to the total value of transactions made through these cards during 2022, amounting to 3.48 billion. dinars, a net increase of 581 million dinars, as these cards are considered the most widely used in electronic purchases abroad, in addition to their multiple uses for purchases or cash withdrawals, and they seem necessary for travelers abroad.

Interest is paid through these cards according to the amount, but withdrawing cash through them incurs additional cumulative interest to the holder depending on the repayment period and the amounts withdrawn. It is noted that the rise in global interest rates over the past year, which according to the Central Bank of Kuwait reached 4.25%, will make the owners of these cards incur higher interest when withdrawing cash.

Here are the key points from the report:

Total Spending – Credit card transactions surged by 16.6% in 2023, reaching 4 billion dinars, up from 3.48 billion dinars in 2022

Interest Rates – With global interest rates rising to 4.25% according to the Central Bank of Kuwait, cardholders face higher interest charges, particularly when withdrawing cash

Domestic vs. International Spending – 62.5% of credit card overdrafts were spent domestically, totaling 2.54 billion dinars.

International spending via credit cards accounted for 37.5% of the total, amounting to 1.52 billion dinars.

Quarterly Withdrawals – During the fourth quarter of 2023, withdrawals from credit cards totaled 1 billion dinars, contributing to the overall increase in spending.

Purchase Behavior – Direct purchases and payments for services via credit cards at local points of sale increased by 21% in 2023, reaching 2.2 billion dinars.

Online spending on websites using credit cards increased by 14.7%, amounting to 1.3 billion dinars

Cash Withdrawals – Cash overdrafts accounted for 13% of total overdrafts, reaching 538.9 million dinars in 2023.
Domestic cash withdrawals increased by 5.26%, while international withdrawals rose by 6.8%.

Overall Growth – Spending on credit cards for various purposes, including direct purchases, online transactions, and cash withdrawals, saw significant growth in both domestic and international categories

These trends underscore the increasing reliance on credit cards for transactions, both within Kuwait and abroad, and highlight the evolving consumer behavior in the digital age.