Sound the alarm: credit card debt rises for the 4th month in a row

The total household credit card debt attracting interest charges has risen for the fourth month in a row, as the country finds itself on a debt treadmill.

The latest RBA credit card statistics, released today for the month of March, shows the total credit card bill attracting interest on personal credit cards is now $17.66 billion, a rise of almost $49 million from the previous month, and an increase of almost $375 million since November 2023.

While post-Christmas credit card debt is common, it usually starts dropping from the month of March. This time around Australia’s credit card debt problem has instead worsened.

RateCity.com.au analysis of RBA data shows this is the first time debt has risen in the month of March since 2015.

RBA: Credit card debt attracting interest charges (excludes commercial cards)

Source: RBA, released 7 May 2024, original data, excludes commercial cards.

Change in debt accruing interest each March 2015-2024 (%)

Source: RBA, released 7 May 2024, original data, excludes commercial cards.

Credit card spending ticks up in March

Spending on credit cards rose in March in seasonally adjusted terms, however, overall spending was down, month-on-month across both credit and debit cards.

Total value of transactions: personal credit and debit cards

Source: RBA, released 7 May 2024, seasonally adjusted data, excludes commercial cards.

The number of credit card accounts continues to rise

The number of credit card accounts rose for the 18th consecutive month.

As of the end of March, there were 12.68 million personal credit card accounts. This is almost 300,000 more than the recent trough in May 2022, but down considerably from the peak of credit card accounts in June 2017 when there were 15.45 million active credit card accounts.

RBA credit card statistics: March 2024 (Note: commercial cards are excluded)

Source: RBA, released 7 May 2024, original data, excludes commercial cards.

RateCity.com.au research director, Sally Tindall, said: “For eight years we’ve seen credit card debt decline in the month of March, but not this time around.”

“We’re very used to seeing households pile up the debt over summer, but the fact that many are still struggling to reduce this debt in March is cause for alarm,” she said.

“A recent RateCity.com.au survey found almost one in seven credit card users were relying on their card to get them through to payday - a strategy that’s destined to fail, and quickly.

“Plugging a budget black hole with the plastic can put you on a debt treadmill that’s difficult to get off.

“If you are struggling with credit card debt, don’t put your head in the sand. Take the time to come up with an action plan that sees you clear the slate clean entirely,” she said.

Solutions for managing credit card debt

1. Call your bank and ask for help. The bank will work with you to find a solution, whether it’s changing your interest rate or putting you in financial hardship.
2. Tell your other providers you are in financial hardship. Many providers will see if you can switch to a cheaper plan or put you on a payment plan. 
3. Consider a circuit breaker. Renting out a spare room, moving somewhere cheaper and leasing out your home or selling up are options you may decide to consider. 
4. Get independent financial advice. Call the national debt helpline on 1800 007 007.

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