Credit card debt back on the rise, as people struggle to clear their bills

Australian households have given their credit cards a workout this month, with the value of transactions and debt attracting interest now on the rise.

Data released today from the RBA for the month of October shows the total credit card bill for households increased by $86.6 million to $16.89 billion, after falling in the previous three months. This is based on personal credit card data in original terms.

The number of credit card accounts increased slightly to 12.39 million this month, up by just 1,470 accounts (0.01 per cent).

Credit card statistics: personal credit cards in October 2022

Note: credit card analysis is based on personal credit card data and excludes commercial cards. 

Source: RBA, released 7 Dec 2022, original data, excludes commercial cards. Monthly change is Sept 2022 to Oct 2022, year-on-year change is Oct 2021 to Oct 2022.

Spending remains strong in October

The value of credit card transactions was $26.15 billion in October, in original terms. While debit card transactions rose to $46.29 billion.

Combined, Australians spent a total of $72.44 billion on their credit and debit cards. This was the second highest level on record behind the August figures, in original terms. Excludes commercial cards.

Spending on credit and debit cards: October 2022

Source: RBA, released 7 Dec 2022, original data, excludes commercial cards. Monthly change is Sept 2022 to Oct 2022, year-on-year change is Oct 2021 to Oct 2022.

RateCity.com.au research director, Sally Tindall, said: “Some households are struggling to clear their credit cards in the face of cost of living and mortgage repayment pressures.”

“After three months of chipping away at credit card bills, the total debt is back up, albeit slightly, to $16.89 billion this month. With the average credit card rate at 17.53 per cent, that’s a huge amount to paying interest on,” she said.

“Spending remained strong across both credit and debit cards in October, clocking in at the second highest level on record, despite the RBA hikes. These figures are unlikely to ease in the next round of data after Australians opened up their wallets to take advantage of the November sales.

“We expect households will start to make cutbacks in their spending, but potentially not until next year, as families start to feel the full impact of the rate hikes, which typically take two- to three-months to hit people’s bank accounts.

“Put the credit card in the bottom draw this Christmas, so you’re not tempted to spend money you can’t afford to repay,” she said.

Source RateCity.com.au. RBA, released 7 Dec 2022, original data, excludes commercial cards.

Source RateCity.com.au. RBA, released 7 Dec 2022, original data, excludes commercial cards.

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