Aussies slash credit card debt by $1.11 billion in lockdown

The national credit card debt accruing interest has fallen to its lowest level in almost two decades as Australians move to wipe debt in lockdown.

The RBA data released today shows the debt accruing interest on personal credit cards is down $1.11 billion from June to July 2021, to a total of just $18.90 billion – the lowest level since February 2004, in original terms.

This is the biggest monthly drop in debt accruing interest since last July when the country was coming out of a national lockdown, and government initiatives such as the early access to super program were operating.

Credit card statistics: personal credit cards in July - excludes commercial cards

Source: RBA, released 7 September 2021, original data, excludes commercial cards. Monthly change is June – July 2021, year-on-year change is July 2020 to July 2021.

RateCity.com.au research director, Sally Tindall, said: “Australians have knocked down more than $1.1 billion in credit card debt in a single month. That’s a mammoth effort.”

“Lockdowns are a kick in the guts, particularly for those who can’t work, but it has helped many households focus on clearing bad debt,” she said.

“While the government hasn’t let people raid their super this time around, savings from lockdown living and tax returns may have helped some families find spare cash.

“At the beginning of COVID, Australians wiped nearly $7 billion off the total debt accruing interest in just six months. This time around, it looks like the lockdowns are having a similar effect. If this trend continues, we could see the national debt accruing interest drop below $18 billion in the next couple of months.

“While we’d all rather be out of lockdown and living freely, at least thousands of families can breathe a sigh of relief knowing their credit card debt no longer has a stranglehold on them,” she said.

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