Australia’s total credit card bill attracting interest charges has dropped by $161 million – the largest drop since last July.
This significant drop comes as they use money back from their tax returns to clear credit card debt. The last time debt accruing interest rose in July was 2009.
Credit card statistics: personal credit in July 2023
Note: commercial cards are excluded
| Amount | Monthly change | Year-on-year change | |
| Debt accruing interest | $17.57 billion | -$161 million
-0.9% |
+$524 million
+3.1% |
| Number of accounts | 12.60 million | +13,138
+0.1% |
+189,995
+1.5% |
Source: RBA, released 7 September 2023, original data, excludes commercial cards.
Monthly change is June to July 2023, year-on-year change is July 2022 to July 2023.
Number of accounts continue to rise
The number of credit card accounts continue to rise this month, with an increase of 13,138 in the month and almost 200,000 year-on-year, as credit card companies mount a fight against BNPL and some Australians reach for a card to help make ends meet.
Soure: RBA. Note this graph begins at $15 billion.
The value of credit card transactions went up for the month of July, boosted by events such as the Women’s World Cup, key movie releases and a boost in cash for some from tax returns.
Total value of transactions: personal credit and debit cards in July 2023
| Amount | Monthly change | Year-on-year change | |
| Total value of transactions (credit + debit) | $74.94 billion | +$307.99 million +0.4% |
+$6.28 billion +9.2% |
| Credit cards: value of transactions | $27.08 billion | +$339.4 million +1.3% |
+$2.02 billion +8.1% |
| Debit: value of transactions | $47.87 billion | -$31.4 million -0.1% |
+$4.26 billion +9.8% |
Source: RBA, released 7 September 2023, seasonally adjusted data, excludes commercial cards.
Monthly change is June 2023 to July 2023, year-on-year change is July 2022 to July 2023.
RateCity.com.au research director, Sally Tindall, said:
“It’s fantastic to see credit card debt drop by $161 million, in the space of one month, as Australians use tax refunds to clear their credit card debt.
Tax time is a great opportunity to wipe the slate clean, however, the challenge is not to add to it throughout the rest of the year.
Households need to ready themselves for a tricky run up to Christmas.
Even without another RBA rise, things are likely to get tougher financially before they get better.
The number of accounts rose again in July, as credit card companies continue their comeback.
Credit card companies have taken a hammering since 2018 as the buy now, pay later sector rattled their business model.
However, in the last 12 months we’ve seen almost 200,000 customers flock back to the plastic.
While some people are taking out new cards in the hunt for frequent flyer points and perks, others are opening them up in case they need a bridge from payday to payday.
If your budget is on the ropes, the last thing you need hanging over your head is credit card debt.
What may seem like a quick fix now can get quickly out of hand,” she said.
