Australia’s credit card debt has made a surprise drop in March after four consecutive months of rises, according to new data from the RBA today.
Debt accruing interest on personal credit cards in March dropped by almost $59 million from the previous month, in original terms to $17.38 billion.
The number of personal credit card accounts also fell slightly by just over 7,000 accounts, to a total of 12.39 million.
Note: credit card analysis is based on personal credit card data and excludes commercial cards.
Credit card statistics: personal credit cards in March 2022
|Amount||Monthly change||Year-on-year change|
|Number of accounts|
|Balances accruing interest|
Source: RBA, released 9 May 2022, original data, excludes commercial cards. Monthly change is Feb 2022 to March 2022, year-on-year change is March 2021 to March 2022.
Between February 2020 and October 2021, Australians made significant headway into credit card debt, knocking over $10 billion off the total balance accruing interest.
However, since then the trend has halted.
RateCity.com.au research director, Sally Tindall, said: “What a nice surprise to see Australia’s total credit card debt drop in the month of March, after four months of small but concerning rises.”
“This unexpected result has come at a time when the cost of basic goods such as petrol and food were on the rise, yet some families have managed to inch ahead on their credit card debt,” she said.
“That said, credit card debt accruing interest is still stubbornly hovering above the $17 billion mark, with little sign of making any significant drops in the near future.
“Last Tuesday’s interest rate hikes will put added pressure on family budgets, which could see credit card debt tick back up, particularly as there’s going to be plenty more cash rate hikes to come.
“The one thing that shouldn’t rise with official rates is the purchase rate on people’s credit cards.
“Over the last decade, the cash rate was cut 18 times, yet credit card rates have broadly remained unchanged. While we expect most lenders won’t push the envelope and increase credit card rates on the back of last Tuesday’s hike, it’s worth keeping an eye out just in case,” she said.
How to know if your credit card interest rate is too high
- The average credit card rate is approximately 17%.
- The lowest credit card rate is 7.49%, from G&C Mutual.
- There are 17 credit cards with rates under 10%, including from CBA, Westpac and Amex.
- There are 4 no interest credit cards (note some of these come with moderate fees).
- The highest credit card purchase rate is 23.99%.