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Credit card debt drops below $20 billion

Credit card debt drops below $20 billion

New RBA figures out today show Australians have slashed the national credit card bill to $19.71 billion in October – the first time debt accruing interest has dropped below $20 billion in almost 16 years.

In the past year, Australians have wiped $7.80 billion in debt and taken the scissors to almost one million credit card accounts.

However, the rate at which Australians are paying off debt and closing cards has slowed in October. Also, people gave their credit cards more of a workout in October, spending $473.8 million more month-on-month, in original terms.

Credit card statistics: monthly and year-on-year changes

OctoberMonthly changeYear-on-year change
(Sept vs Oct 2020)(Oct 2019 vs Oct 2020)
Number of credit card accounts






Total balances accruing interest

-$362.5 million

-$7.80 billion

$19.71 billion



Total number of transactions

6.7 million

-14.0 million

233.2 million



Total value of transactions

$473.8 million

-$3.24 billion

$20.34 billion



Source: RBA, released 7 December 2020, original data, excludes commercial cards.

RateCity.com.au research director, Sally Tindall, said it was great to see the total debt accruing interest drop below $20 billion. 

“It’s taken us 16 years to get here, and let’s hope we can keep the debt accruing interest under $20 billion on the other side of Christmas,” she said.

“While Australians are still chipping away at their outstanding credit card debt, the rate at which we’re knocking it off has slowed.

“Next month the number of transactions is likely to spike as a result of pre-Christmas sales, such as Click Frenzy and Black Friday. 

“The real test will be whether the debt accruing interest spikes too or whether Australians have learnt their lesson about the perils of racking up high interest credit card debt.

“If you’ve given your credit card a workout in the lead up to Christmas, try and work out a plan to pay your debt off before your interest free days expire.

“The last thing you want is to start 2021 with a mountain of debt at rates as high as 24.99 per cent,” she said.

Tips for using your credit card this Christmas 

  • Set a budget: Make a list and don’t overspend.
  • Take away the temptation: Put your credit into the freezer once you’ve reached your budget limit.
  • Make a plan to pay it back: Before you spend, make sure you have enough money to pay it back in January, so you’re not lumped with interest charges.

Credit card statistics: change since COVID

MarchOctoberChange since COVID
Number of credit card accounts




Lowest since Nov 2007


Balances accruing interest

$26.98 billion

$19.71 billion

-$7.27 billion

Lowest since Oct 2004


Source: RBA, released 7 December 2020, original data, excludes commercial cards.

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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.



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