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Tide is turning for credit card spending

Tide is turning for credit card spending

08 Aug, 2022 - 4 min read

Australians spent almost $25 billion on credit card purchases in June, despite rising cost of living pressures. However, the tide appears to be turning.

RBA figures out today show that overall, the value of credit card purchases rose $39.1 million – or +0.2 per cent – month-on-month, in original terms. This is based on personal credit card data.

However, domestic credit card spending dropped $134.4 million (-0.6 per cent) in June, as Australians tighten the belt.

Meanwhile, the value of overseas credit card purchases jumped $173.5 million (+15.0 per cent), month-on-month, as Australians travelled internationally.

Credit card statistics: personal credit cards in June 2022

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

	Amount	Monthly change	Year-on-year change
Value of purchases - TOTAL	$24.96 billion	$39.1 million 0.2%	$3.28 billion 15.1%
Value of purchases - domestic	$23.6 billion	-$134.4 million -0.6%	$2.47 billion 11.7%
Value of purchases - overseas	$1.33 billion	$173.5 million 15.0%	$809.3 million 154.7%

Source: RBA, released 8 August 2022, original data. Monthly change is May 2022 to June 2022, year-on-year change is June 2021 to June 2022.

RBA debit card statistics, also out today, showed a similar trend as people spent almost half a billion less ($485.8 million) on debit purchases in June, month-on-month, after an increase in the month of May.

Total value of purchases, credit + debit

	Amount	Monthly change	Year-on-year change
Value of credit card purchases - total	$24.96 billion	$39.1 million 0.2%	$3.28 billion 15.1%
Value of debit card purchases - total	$41.78 billion	-$485.8 million -1.1%	$7.10 billion 20.5%
TOTAL value of card purchases (credit + debit)	$66.74 billion	-$446.7 million -0.7%	$10.38 billion 18.4%

Source: RBA, released 8 August 2022, original data. Monthly change is May 2022 to June 2022, year-on-year change is June 2021 to June 2022.

Credit card debt, accounts tick up in June

Australia’s total debt accruing interest ticked up in June, rising $32.3 million (+0.2 per cent) in the month, after falling for the previous three months.

The number of credit card accounts rose slightly, by 7,433 (+0.1 per cent) accounts, to 12.4 million accounts. However, there were still 129,134 fewer accounts compared to a year ago.

Credit card statistics: personal credit cards in June 2022

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

	Amount	Monthly change	Year-on-year change
Debt accruing interest	$17.35 billion	$32.3 million 0.2%	-$2.23 billion -11.4%
Number of accounts	12.4 million	7,433 0.1%	-129,134 -1.0%

Source: RBA, released 8 August 2022, original data. Monthly change is May 2022 to June 2022, year-on-year change is June 2021 to June 2022.

RateCity.com.au research director, Sally Tindall, said: “The tide appears to be turning for credit card spending, as rising living costs and interest rate hikes finally take a toll.”

“While credit card spending rose overall in June, domestic spending on credit cards actually dropped by $134.4 million compared to the previous month,” she said.

“Similarly, Australians spent almost half a billion dollars less on their debit cards in June, as people tightened the purse strings.

“Up until now official data has shown that people were still spending up big at the shops, despite the fact consumer confidence has been falling on the back of rising interest rates and inflationary pressures. These figures suggest people are finally putting the brakes on spending.

“Worryingly, Australia’s debt accruing interest bill also ticked up in June, after falling for the previous three months. The fear is that rising living costs will see people rely on their credit cards to help make ends meet.

“The exodus to buy now, pay later appears to have plateaued, with no significant changes to the number of credit card accounts in almost a year.

“While reaching for the credit card may plug the gap until your next pay, know that it’s a band-aid solution that can easily backfire, and quickly,” she said.

Screen Shot 2022-08-08 at 5.26.20 pm

Source: RBA, released 8 August 2022, original data. Excludes commercial cards.

Screen Shot 2022-08-08 at 5.27.04 pm

Source: RBA, released 8 August 2022, original data. Excludes commercial cards.

Screen Shot 2022-08-08 at 5.27.43 pm

Source: RBA, released 8 August 2022, original data. Excludes commercial cards.

Disclaimer

This article is over two years old, last updated on August 8, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent credit cards articles.

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

Laine Gordon

Money Editor

Laine Gordon is the Money Editor at RateCity and an experienced journalist and research specialist. With a background in news and feature writing, covering finance, media and even food (a passion of hers) at Reed Elsevier publications, Laine brings almost two decades of experience to the team. Having covered major areas of interest to the general public from hip pocket issues to rising and falling interest rates and the impact to mortgages, credit and saving in Australia, she is passionate about researching and telling people’s stories to help others make better decisions about their own finances.