The widespread price hike in Israel does not seem to have an effect on citizens’ consumption – On the contrary, Israelis continue to heat up their credit cards, breaking a new record for the volume of purchases in shopping centers last month.
Figures collected by the bank service Shva showed that in June, a new daily record for credit card usage in Israel was recorded: over $ 355 million, a 1.7 percent increase compared to the previous record in November 2021 for Black Friday.
“The Israeli consumer is increasing the volume of spending thanks to the credit card, which has become the most convenient and available means of payment,” said Ronit Tischler Petty, vice president of operations and partner relations at Shva.
“The June data was characterized by a sharp increase in in-store and non-online purchases, which led to a new record high in daily spending volume,” he continued, the ICE financial newspaper reported.
Israelis are therefore addicted to credit cards.
Spending among Israelis with the cashless payment method amounted to $ 116.6 billion in 2021, an increase of almost $ 16 billion compared to 2020, according to Shva.
“When we withdraw cash, we know in advance that we are limited, while when we pay by card, even if we are debited at the end of the month, we have the feeling of being unlimited and that is fantastic,” Jessica, an Israeli citizen, told i24NEWS.
“We’re in a consumer society where we want everything right away so when we see something we like it’s easy we pull out our card, and it’s ours,” she added, saying the price hike won’t change her consumer activity.
In 2021, Israelis paid the most by credit card in the food industry – $ 15.5 billion, far ahead of the appliance sector, with purchases amounting to $ 7.4 billion. In the clothing and footwear industry, spending on cards amounted to almost $ 7.3 billion, while in restaurants it was $ 6.5 billion.
A recent rise in the price of eggs, bread, cinema tickets, and gasoline does not seem to have disturbed the daily lives of Israelis. More worrying, however, is the 9.6 percent increase in electricity prices expected next month.
“The increase in the price of electricity is the worst we can know, especially in the middle of summer, because the air conditioning is running non-stop and it consumes a lot,” Tal, a manager of a beauty salon in Jerusalem, said to i24NEWS.
“The prices were already high but then, we have no choice but to live on credit to get by.”