Australia’s total credit card bill attracting interest charges has dropped for the second time in nine months to a total of $17.73 billion.
This is despite the fact the number of credit card accounts rose for the ninth month in a row, to a total of 12.6 million, according to new RBA data released today.
However, at $17.73 billion, the total credit card debt among Australian households is still too high.
RateCity.com.au research shows those that have debt are collectively shelling out $8.57 million a day in interest charges.
Credit card statistics: personal credit in June 2023
Note: Commercial cards are excluded
Source: RBA, released 8 August 2023, original data, excludes commercial cards.
Monthly change is May to June 2023, year-on-year change is June 2022 to June 2023.
Source: RBA, released 8 August 2023, original data, excludes commercial cards.
Source: RBA, released 8 August 2023, original data, excludes commercial cards. * Graph starts at 10M.
While credit card debt came down this month, the total amount spent on credit and debit cards rose, along with the number of transactions on these cards.
Total value of transactions: credit and debit cards in June 2023
Source: RBA, released 8 August 2023, seasonally adjusted data, excludes commercial cards.
Monthly change is May 2023 to June 2023, year-on-year change is June 2022 to June 2023.
Total number of transactions: credit and debit cards in June 2023
Source: RBA, released 8 August 2023, seasonally adjusted data, excludes commercial cards.
Monthly change is May 2023 to June 2023, year-on-year change is June 2022 to June 2023.
RateCity.com.au research director, Sally Tindall, said:
“It’s a relief to see credit card debt moving in the right direction, but at $17.73 billion, the total is still too high.
Credit card debt is one of the worst types of debt, with an average interest rate of 17.64 per cent, and for many households, little or nothing to show for the debt except a stack of shopping receipts,” she said.
“If you’ve got credit card debt casting a dark cloud over your household budget each month, consider a circuit breaker.
A personal loan that forces you pay off your debt in full can be one way to cut the umbilical cord.
Switching your debt over to a low-rate credit card or a new balance transfer deal can also provide relief, but it leaves the door wide open for things to unravel again,” she said.
“Credit cards companies are staging a comeback, with over 200,000 more credit card accounts open today than there were a year ago.
“That’s a significant turnaround for an industry that has been hammered by the explosion of buy now, pay later options,” she said.
