New Zealanders spent more on their credit and debit cards in October than the previous month but are remaining prudent with their money, according to figures out today.

Spending through the Paymark electronic network increased 0.3 per cent last month to $3.89 billion, the company said today.

Figures out last week from Statistics New Zealand showed card spending increased a seasonally adjusted 0.4 per cent in October, led by fuel, motor vehicle related spending and durables.

Paymark's head of sales and marketing Paul Whiston said although spending did increase through its network last month, it amounted to only 2 per cent more than a year ago.


"A comparison of annual growth now and one year ago reveals the story," he said.

Spending on non-discretionary items - which includes purchases from supermarkets, butchers, and fruit and vegetable vendors - was 0.3 per cent lower than September.

Total spending in the sector was $1.484 billion, 2.3 per cent higher than a year ago. Annual growth in October 2011 was 2.4 per cent.

Both low annual figures reflected low food price inflation rates, Whiston said.

Other Statistics New Zealand figures out yesterday showed food prices were up only 0.3 per cent for the year to October 2012, which came after five consecutive annual decreases.

Whiston said card spending on housing-related goods remained a key driver of overall growth last month.

Kiwis spent $312 million at the likes of home decorating and hardware stores, gardening stores, and furniture stores in October.

That was 8.6 per cent higher than a year ago, and 0.8 per cent higher than the previous month.

Discretionary spending - including travel companies, gyms, tyre companies, and dentists - fell 0.1 per cent to $517 million. That was 0.8 per cent higher than October last year.

Kiwis were continuing to be prudent with their money, Whiston said.

"That said, within the discretionary spend, we have increased our spending on our vehicles (repairs, parts, tyres) and our bodies (dentist, gym) in recent months.

"Together with the extra housing expenditure, this spending pattern hints at a mood of 'investment' rather than 'consumption' at the moment."

Spending in the hospitality sector amounted to $377 million last month, 0.4 per cent higher than September but 1.9 per cent less than October 2011.

Whiston said the annual drop could be put down to the 'Rugby World Cup effect'.

Last month, the annual inflation rate fell to 0.8 per cent, its lowest since December 1999.

It was pulled down after the consumer price index (CPI) rose a weaker-than-expected 0.3 per cent in the September quarter.