Australia’s credit card debt accruing interest has slid to the lowest level in over 11 years as Australians start to wean themselves off high interest debt.
The RBA credit card statistics released today show Australia’s debt accruing interest on personal credit cards is now $29.5 billion, down 4.9 per cent year-on-year, and the lowest since December 2007.
The number of personal credit card accounts has fallen 3.1 per cent year-on-year. There are now 470,088 fewer active accounts than there were in April 2018.
Interestingly, today’s statistics show people with credit cards are using them more. The number of purchases increased 6.45 per cent year-on-year, while the value of purchases rose 2.16 per cent.
RateCity.com.au research director Sally Tindall said it was great to see Australians make headwind into the mountain of collective credit card debt.
“For some people, it’s finally starting to twig that in order to make a credit card worthwhile, they need to pay it off regularly,” she said.
“With rates as high as 24.99 per cent, credit card debt can burn a hole in your pocket. Australians are wising up to this.
“Interestingly, today’s data shows that while the number of accounts has dropped, people who still have a credit card are using them more.
“Banks are also cracking the whip at their end under instructions from ASIC to assess a person’s ability to repay their entire credit card limit within three years.
“As a result, credit limits have fallen to the lowest level in more than three and half years as new customers are being forced to cut back.
“With over $29 billion in debt accruing interest, we’re not out of the woods yet, but today’s results are a promising sign.”
RBA personal credit card statistics – APRIL 2019
Change YOY %
Balances accruing interest
Lowest since Dec 2007
No. of personal credit card accounts
Lowest since Dec 2014
(470,088 fewer accounts than last April)
Credit card limits
Lowest since Sept 2015
No. of credit card purchases
Third highest month on record
Notes: Excludes commercial cards, using original data from the RBA. Data released 12 June 2019