For the first time in six months, the amount of credit card debt incurring interest has decreased, but the total balance of $17.73 billion is still wreaking havoc on the finances of many Australians.
The RBA's latest data reveals that the total debt attracting interest charges has fallen by 0.1% or $19 million from the previous month, in original terms.
Assuming the average personal credit card rate of 17.64%, the total interest bill amounts to $8.6 million per day or $265.7 million for the month of March.
Credit card statistics: personal credit cards in March 2023
| Amount | Monthly change | Year-on-year change | |
| Debt accruing interest | $17.73 billion | -$19 million
-0.1% |
$350 million
2% |
| Number of accounts | 12.5 million
|
22,155
0.2% |
151,553
1% |
Source: RBA
Spending remains elevated, despite rate hikes
The combined value of transactions made through both debit and credit cards experienced a slight decrease of 0.1% compared to the previous month.
However, when compared to the same period last year, there was a significant increase of 11%.
Spending on credit and debit cards: March 2023
| Amount | Monthly change | Year-on-year change | |
| Value of credit card transactions (personal cards only) | $25.75 billion | -$221 million -0.9% |
+$2.29 billion +10% |
| Value of debit card transactions | $46.67 billion | $137 million 0.3% |
+$4.92 billion +12% |
| Total | $72.42 billion | -$84 million -0.1% |
+$7.21 billion +11% |
Source: RBA
RateCity.com.au research director, Sally Tindall, said:
“Credit card debt went in the right direction in March but after five months of rises, this drop is more likely to be an anomaly, rather than a turnaround.
Australians are forking out an estimated $8.6 million a day in credit card interest on a total debt of $17.73 billion.
That money would be far better off in people’s pockets rather than the banks.
We expect credit card debt to tick back up in the months ahead as people struggle through the winter under cost-of-living pressures.
Most borrowers haven’t yet started paying for the March hike, let alone the May one.
In a couple of months’ time, some families could suddenly find they’re in too deep.
The credit card might feel like the only option to get you through to the next payday, however, with an average interest rate of 17.64 per cent, it’s like putting a Band-Aid over a bullet wound.
If you don’t have enough money to pay the bills, call up your providers and ask for help.
Banks and utility companies have hardship programs you can use instead of transferring the problem over to plastic."
