Spending on Zopa’s credit card rose by 110pc this year
Zopa has seen total spending on its credit card rise by 110 per cent from January to April.
The digital bank launched its first-ever credit card in October last year, which allowed customers to set their own personal financial buffer and receive an instant notification to let them know they are getting close to their safety net limit.
Fresh data from the digital bank has shown that its number of credit card customers increased by 24 per cent and spending per customer rose by 70 per cent over the first four months of the year.
Zopa Bank was launched as a sister company to peer-to-peer consumer lender Zopa last year, after the firm was granted its full bank licence in June 2020.
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Zopa’s data also showed that car finance volumes increased by 50 per cent year-on-year since February 2020. The average car loan made by Zopa in the first quarter was just under £10,000.
The firm said its loan disbursals in April 2021 have more than doubled from the same period last year after its lending criteria was significantly tightened in response to the pandemic in March 2020.
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“Throughout the pandemic, we have observed that many people have spent less and used some of their savings to pay back credit cards and loans. As a result, they are coming out of the pandemic with improved finances,” said Zopa’s chief executive Jaidev Janardana (pictured).
“Many consumers want to continue this into their ongoing life, and Zopa’s product features like no early repayment fees, and creating safety nets on your credit card encourage customers to do so.
“Our data also shows that as people’s confidence has improved, probably fuelled by positivity over the progress seen in the vaccine roll out, which means they want to kick off long delayed life plans – and we can see that over 2021 through increases in loan demand and car finance levels going up.
“There is also pent up demand for experiences and variety as our own credit card data shows that spending per customer increased 70 per cent from January 2021 to April 2021 as non-essential retail and outdoor hospitality reopened. We expect to see spending go even higher as indoor hospitality opens later this month.”
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Bank of England data released on Tuesday showed that savers continued to put more money into low-paying cash savings accounts last month, continuing a trend seen throughout the pandemic.
Households put £16.2bn into cash deposits in March, above the monthly average of £15.2bn during the past year.
This remains well above the monthly average of £5.6bn in the six months to February 2020.