Australia’s credit card debt rises for the fifth consecutive month: a sign of financial strain?

Australia’s total credit card debt has continued to climb, with data released from the Reserve Bank of Australia (RBA) indicating that it rose for the fifth month in a row in February 2023.

The RBA figures showed that the total credit card bill attracting interest charges increased by $270 million to $17.75 billion – the highest level since August 2021.

Credit card statistics: personal credit cards in February 2023

Note: credit card analysis is in original terms and is based on personal credit card data, excluding commercial cards.

This is based on personal credit card data in original terms and excludes commercial cards.

The number of accounts also rose by 28,744 to 12.48 million.

Spending in February dips slightly

Australians spent less on their debit and credit cards in February, dropping by $435 million (-0.6 per cent) to $72.71 billion in seasonally adjusted terms, despite the fact that the cost of goods and services continued to rise.

Spending on credit and debit cards: February 2023

Note: credit and debit card analysis is in seasonally adjusted terms.

RateCity.com.au research director, Sally Tindall, has commented on the data, saying:

“Some Australians are starting to crack under the pressure of rising costs and RBA rate hikes as they reach for the credit card to make ends meet.”

Tindall also suggests that while credit cards may seem like a quick solution, there are other options available to combat the rising cost of living.

These include shopping around for supermarket specials, renegotiating energy bills and other expenses, and taking advantage of concessions and rebates.

Advice to those struggling with debt

If you are struggling with credit card debt, Tindall advises switching to a personal loan where you are forced to pay back the debt in regular instalments, which can help avoid the temptation to rack up more debt.

It is important to remember that relying on credit cards to cover living expenses can lead to long-term financial difficulties and should be avoided where possible.

Overall, the continued rise in credit card debt is a worrying sign of financial strain for some Australian households.

It is important to seek financial advice and explore all available options to manage expenses and avoid long-term debt.

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.