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Australia’s credit card debt rises for 3rd consecutive month

National credit card debt rose for the third consecutive month to $17.39 billion, according to new data from the RBA today.

Worryingly, interest on personal credit card debt rose $148.7 million in January, month-over-month, in source terms.

The rise comes as Australians spent $4.28 billion less on their credit cards than the previous month and 14,276 fewer credit card accounts.

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

Credit card statistics: personal credit cards in January 2022

Rising Monthly change Year-over-year variation
Number of accounts

12.4 million

-14,276

-353,504

-0.12%

-2.77%

Number of transactions

241.3 million

-42.5 million

10.0 million

-14.97%

4.31%

Value of transactions

$21.07 billion

-$4.28 billion

$1.79 billion

-16.90%

9.26%

Interest bearing balances

$17.39 billion

$148.7 million

-$2.37 billion

0.86%

-11.97%

Source: RBA, published March 7, 2022, original data, excluding commercial charts. The monthly change is from December 2021 to January 2022, the annual change is from January 2021 to January 2022.

RateCity.com.au research director Sally Tindall said: “Watching credit card debt rise is a real concern and a sign that some Australians are doing things tough.”

“It’s been almost four years since we last saw interest on debt go up for three months in a row,” she said.

RateCity.com.au estimates that Australia’s total credit card interest bill for January was $257 million. This is based on the average RBA credit card rate of 17.38%.

“There’s a growing number of credit card users whose debt is going the wrong way,” she said.

“Anyone having trouble paying off their credit card should pick up the phone and ask their provider for help.

“While for most Australians things are getting back to normal now that COVID restrictions have eased, rising costs at the supermarket and at the petrol pump may put additional financial strain on many families.

“With interest rate hikes on the horizon, now is a great time for all households to buckle down and budget to ensure they have a buffer,” she said. .

Tips for Dealing with Credit Card Debt

  • Call your bill providers (energy, telco, etc.) and ask for a temporary reprieve.
  • Cut back on non-essential spending until your credit card is back in the black.
  • Ask your credit card provider for a lower interest rate or consider switching to a low rate card.
  • An alternative is to convert your debt into a personal loan that requires you to repay the debt in full.
  • Once you’ve settled your debt, consider reducing your credit card limit or removing the card altogether.