Australia’s credit card debt rises for 4th month in a row

The national credit card debt has risen for the fourth month in a row to $17.44 billion, according to new data from the RBA today.

Debt accruing interest on personal credit cards in February increased by $50.8 million from the previous month, in original terms.

The number of accounts stayed relatively flat, rising by just 4,853 accounts, to a total of 12.4 million.

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

Credit card statistics: personal credit cards in February 2022

Source: RBA, released 7 April 2022, original data, excludes commercial cards. Monthly change is Jan 2022 to Feb 2022, year-on-year change is Feb 2021 to Feb 2022.

RateCity.com.au research director, Sally Tindall, said: “Credit card debt has ticked up for the fourth month in a row. While the rises have, so far, been relatively moderate, it’s a red flag some Australians are doing it tough.”

“Australians made huge headway into credit card debt over the last two years. It’s agonising to see some of that hard work come undone,” she said.

“You only have to go to the petrol station or the supermarket to know that inflation is on the rise and that’s putting pressure on some family budgets.

“Families who are struggling to make the monthly budget add up should search high and low for a more permanent solution instead of sticking any excess on the credit card.

“Credit debt accruing interest at a rate of 17 per cent – sometimes even more – is the last thing people need if they’re having trouble keeping on top of the bills.

“If you’re struggling to make ends meet, look for ongoing ways you can inject some relief. Switching utilities providers, cutting back on meals out and rotating your entertainment subscriptions might seem trivial, but they all add up,” she said.

Source: RBA.

Tips to deal 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 reduced interest rate or consider switching to a low-rate card.
• An alternative is to switch your debt to a personal loan which forces you to pay the debt back in full.
• Once you’ve cleared your debt, consider dropping your credit card limit or cutting up the card altogether.

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