How much have you been using your credit cards lately?
According to RBA's latest data for July, Australians gave their credit cards a much-needed break in July, with the total debt and value of transactions both dropping from the previous month.
In fact, it shows debt accruing interest was $17.04 billion, a drop of $308 million (-1.8%) from the previous month, in original terms.
The value of credit card transactions also fell by $1.58 billion (-6.3%) when compared to June.
Overall, however, spending was up, with the value of debit card transactions rising by $1.75 billion (+4.1%) from the previous month.
Ms Sally Tindall, Research Director for RateCity.com.au shared her insights:
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“Australians gave their credit cards a bit of a breather in July, with the total value of transactions dropping by $1.58 billion.
People might still be out at the shops, spending up a storm but at least they’re putting less on credit, which is a good thing.
Households know tough times are ahead. It’s good to see people opting for debit rather than credit when they go to pay.
Let’s hope this shift becomes a trend in the months ahead as family budgets get tighter on the back of rising interest rates and cost of living pressures.
While it’s great to see credit card debt drop, at just over $17 billion the bill is still way too high.
If you have credit card debt, try and knock it down now, as things are only going to get tougher as we head towards Christmas."