Australians wipe $9.31 billion off credit card debt since COVID

The national credit card debt accruing interest has fallen to the lowest level in almost 18 years, as Australians continue to clear their debt in the latest lockdown.

The RBA data released today shows debt accruing interest on personal credit cards is down $9.31 billion from March 2020 to September 2021, to a total of just $17.68 billion – the lowest level since November 2003.

Analysis is based on personal credit card data and excludes commercial credit cards. 

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

Source: RBA, released 8 November 2021, original data, excludes commercial cards. Monthly change is August - September 2021, year-on-year change is September 2020 to September 2021, since COVID change is March 2020 to September 2021.

Source: RBA.

RateCity.com.au research director, Sally Tindall, said: “Australians have paid down more than $9 billion in credit card debt since COVID hit, a drop of over one third.”

“Lockdown living helped many families kick stubborn credit card debt as they channeled money saved from not going out towards improving their financial position,” she said.

“The test will be whether Australians can enjoy a lockdown-free Christmas without falling back into bad credit card habits.

“The number of accounts keeps on dropping as customers turn their backs on credit cards for good, with many switching to the buy now, pay later market for their credit fix.

“A lot of people are operating under the assumption that buy now, pay later is a comparatively safe form of debt because it doesn’t attract interest. 

“These platforms might be interest-free, however, they often come with hefty late fees and can lead to overspending if people aren’t careful.

“Whether you’re using a credit card or a buy now, pay later service, think carefully about how much debt you’re taking on and make sure you clear it before you get hit with any extra charges,” she said.

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