The widespread price hike in Israel does not seem to have effected its 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.
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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% 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.
It should be noted that in Israel, "credit cards" actually function as debit cards, and everything a customer spends on the card is automatically deducted from their checking account at the end of the month.
"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," Tischler Petty continued, the ICE financial newspaper reported.
Cashless payments by Israelis comprised $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're limited, while when we pay by card, even if we're debited at the end of the month, we have the feeling of being unlimited and that's 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," Jessica added, saying the price hike wouldn't change her consumer activity.
In 2021, Israel's food sector saw the most charge purchases -- $15.5 billion, far ahead of the appliance sector, where purchases amounted 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 disrupted Israelis' daily lives. More worrying, however, is the 9.6% hike in electricity prices expected in August.
"The increase in the price of electricity is the wors … especially in the middle of summer, because the air conditioning is running non-stop and it consumes a lot," Tal, a beauty salon manager in Jerusalem, told i24NEWS.
"The prices were already high but then, we have no choice but to live on credit to get by," Tal said.
i24NEWS contributed to this report.
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