Worrying trend: Australia’s credit card debt rises for 3rd month in a row RateCity - Laine Gordon 7 March '22 Sally Tindall, research director
The national credit card debt has risen for the third month in a row to $17.39 billion, according to new data from the RBA today.
Worryingly, debt accruing interest on personal credit cards increased by $148.7 million in January, month-on-month, in original terms.
The rise comes despite Australians spending $4.28 billion less on their credit cards than the previous month, and 14,276 fewer credit card accounts.
Analysis is based on personal credit card data and excludes commercial cards.
Credit card statistics: personal credit cards in January 2022
| Amount | Monthly change | Year-on-year change | |
|
Number of accounts
|
12.4 million |
-14,276 |
-353,504 |
|
-0.12% |
-2.77% |
||
| Number of transactions |
241.3 million |
-42.5 million |
10.0 million |
|
-14.97% |
4.31% |
||
| Value of transactions |
$21.07 billion |
-$4.28 billion |
$1.79 billion |
|
-16.90% |
9.26% |
||
| Balances accruing interest |
$17.39 billion |
$148.7 million |
-$2.37 billion |
|
0.86% |
-11.97% |
Source: RBA, released 7 Mar 2022, original data, excludes commercial cards. Monthly change is December 2021 to January 2022, year-on-year change is Jan 2021 to Jan 2022.
RateCity.com.au research director, Sally Tindall, said: “Watching credit card debt tick up is a real concern and a sign some Australians are doing it tough.”
“It has been almost four years since we have seen debt accruing interest rise for three months in a row,” she said.
RateCity.com.au estimates Australia’s total credit card interest bill for January was $257 million. This is based on the RBA average credit card rate of 17.38 per cent.
“There is a growing number of credit card users whose debt is going the wrong way,” she said.
“Anyone struggling to pay off their credit card should pick up the phone and ask their provider for help.
“While for most Australians, things are getting back to normal now COVID restrictions have eased, rising costs at the supermarket and petrol pump may be putting additional financial pressure on many families.
“With interest rate hikes on the horizon, now is a great time for all households to buckle down and budget to help ensure they have a buffer,” she said.
Tips to deal with credit card debt
- Call your bill providers (energy, telco etc) and ask for a temporary reprieve.
- Cut back on non-essential spending until your credit card is back in the black.
- Ask your credit card provider for a reduced interest rate or consider switching to a low rate or fee card.
- An alternative is to switch your debt to a personal loan which forces you to pay the debt back in full.
- Once you’ve cleared your debt, consider dropping your credit card limit or cutting up the card altogether.