$8.6 million a day: credit card debt drops but Australians still forking out millions

Credit card debt accruing interest has dropped for the first time in six months, however, at $17.73 billion, the total bill is causing havoc on many Australians’ finances.

Data released today from the RBA shows the total credit card debt attracting interest charges was down 0.1 per cent or $19 million from the previous month, in original terms. 

At the average personal credit card rate of 17.64 per cent, that’s a total interest bill of $8.6 million per day, or $265.7 million in March. 

Credit card statistics: personal credit cards in March 2023

Note: credit card analysis is in original terms and is based on personal credit card data, excluding commercial cards.

Source: RBA, released 8 May 2023, original data, excludes commercial cards. Monthly change is Feb 2023 to Mar 2023, year-on-year change is Mar 2022 to Mar 2023.

Source RateCity.com.au. RBA, released 8 May 2023, original data, excludes commercial cards. Note: graph starts at $15 billion.

Spending remains elevated, despite rate hikes

The value of transactions across both debit and credit cards combined was down 0.1 per cent from the previous month but up 11 per cent when compared to the previous year.

Spending on credit and debit cards: March 2023

Note: credit and debit card analysis is in seasonally adjusted terms. 

Source: RBA, released 8 May 2023, seasonally adjusted data, excludes commercial cards. Monthly change is Feb 2023 to Mar 2023, year-on-year change is Mar 2022 to Mar 2023.

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’,” she said.

“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 the plastic.

“Good Shepherd offers no interest loans for emergencies for people earning less than $70,000, while the National Debt Helpline can put people in touch with a free financial counsellor,” she said.

Compare credit cards