Australia’s total credit card bill attracting interest charges crept up in the month of December, hitting a total of $17.31 billion, an increase of almost $21 million.
The slight increase in debt comes on the back of a bumper spending spree in November, in which the total value of personal credit and debit card spending combined hit a record high, spurred on by the sale period.
That said, credit card debt accruing interest for December is still $64 million lower than it was the same time a year ago, despite a steady increase in the number of credit card accounts, according to the latest credit card statistics from the RBA.
The RBA data shows the number of accounts has risen by over 188,000 in the last 12 months and by almost 280,000 accounts since the start of the RBA rate hikes (May 2022).
RBA credit card statistics: December 2023 (Note: commercial cards are excluded)
Amount
Monthly change
Year-on-year change
Debt accruing interest
$17.31 billion
+$20.6 million +0.1%
-$64.3 million -0.4%
Number of accounts
12.66 million
+32,410 +0.3%
+188,516 +1.5%
Source: RBA, released 7 Feb 2024, seasonally adjusted data, excludes commercial cards. Monthly change is Nov 2023 to Dec 2023, year-on-year change is Dec 2022 to Dec 2023.
Credit card debt accruing interest – last 5 years
Source: RBA. Note excludes commercial cards.
Number of credit card accounts: last 3 years
Source: RBA. Note excludes commercial cards.
Purse strings snap back shut in December
After a record-breaking November, where Australians spent more on personal credit and debit cards combined than in any other month in history, shoppers tightened the purse strings in December, with the value of both personal credit and debit transactions falling.
Total value of transactions: personal credit and debit cards
Amount
Monthly change
Year-on-year change
Credit
$26.64 billion
-$337.7 million -1.3%
+$1.24 billion +4.9%
Debit
$47.83 billion
-$1.06 billion -2.2%
+$3.33 billion +7.5%
TOTAL
$74.47 billion
-$1.40 billion -1.8%
+$4.58 billion +6.5%
Source: RBA, released 7 Feb 2024, seasonally adjusted data, excludes commercial cards. Monthly change is Nov 2023 to Dec 2023, year-on-year change is Dec 2022 to Dec 2023.
What to do if you have credit card debt hanging over your head
Remove the temptation: put your credit card in your freezer, a bottom draw, or better yet, in the bin (provided you destroy it properly first) so you can’t make a bad situation worse. Make sure you take the credit card off your phone as well, if it’s on there.
Consider your options: call your credit card provider and see what suggestions they have to help you pay down your debt. One option is to ask them to lower your interest rate while you pay it off, or you can potentially consider switching the debt over to a personal loan. A good place to start can often be the National Debt Helpline (1800 007 007) as they can put you in touch with a free financial counsellor that can give you independent advice.
Contemplate a side hustle: getting a second job or picking up some extra shifts, even temporarily, won’t be fun but can help you make headway into your debt. Alternatively, consider making some quick cash by selling anything that’s gathering dust in your home.
Cash in some of your rewards points: if you are swimming in rewards points, consider trading some of them in for supermarket vouchers so you can use money you would have spent on groceries to pay down your debts.
Apply for a no interest loan: Good Shepherd can’t pay your credit card debt for you, but they might be able to help with important expenses that you would have otherwise put on your credit card, such as car repairs or replacing a broken fridge. To be eligible, you have to earn under $70,000 per annum before tax ($100K as a couple) and show you can repay the loan.
Beware of the balance transfer deal: balance transfer deals, where you transfer an existing debt on to a new credit card with an interest-free period, can seem like a clever trick but these cards can often trip shoppers up and ultimately make a bad situation worse.
Eden Radford is the External Comms Lead for RateCity, bringing almost a decade of experience across the finance services and technology sectors. In prior years, Eden has worked with Lendi, Aussie, Xero, Qualcomm, Accenture, and Dyson, among others, while being a pillar of expertise for government clients and contracts, as well. Eden has a passion for improving financial literacy, data storytelling and helping people better understand the decisions they can make about their own finances.
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