December spending spree kicks credit card debt back above $20 billion

December spending spree kicks credit card debt back above $20 billion

Credit card debt accruing interest has risen for the second month in a row, now back above $20 billion dollars.

The latest RBA statistics out today show debt accruing interest increased 1 per cent from November to December to $20.16 billion on personal credit cards in original terms. It had fallen below $20 billion in October 2020.

As a result, Australians were hit with an estimated total interest bill of over $290 million for the month of December, according analysis of RBA data.

While credit debt rose in both November and December, compared to last year, credit card spending is down 4 per cent and debt accruing interest has dropped by a staggering 26 per cent.

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



Monthly change

(Nov vs Dec 2020)

Annual change

(Dec 2019 vs Dec 2020)

No. of credit card accounts

12, 822 938
Lowest since Aug 2007

Balances accruing interest

$20.16 billion $205 million
-$6.98 billion

Value of transactions

$24.60 billion $1.81 billion
-$1.04 billion

Source: RBA, released 8 February 2021, original data, excludes commercial cards. 

Australians put a mammoth $24.60 billion on their credit cards in December, that’s 8 percent higher than November.

However, it wasn’t just credit cards getting a workout, debit card transactions were up 11 per cent month-on-month to $40.86 billion, the highest on record.

Year-on-year debit card transactions have increased 18 per cent, up $6.27 billion from the previous December.

December debit cards: monthly and year-on-year changes

Value of transactions 


Monthly change

(Nov vs Dec 2020)

Annual change

(Dec 2019 vs Dec 2020)

 Debit Cards

$40.86 billion
Highest on record
$4.12 billion
$6.27 billion

Source: RBA, released 8 February 2021, original data, excludes commercial cards. research director, Sally Tindall, said: “Australians went on a credit card spending spree over the Christmas period, with almost $25 billion worth of transactions.”

“While households tend to spend more over the holidays, what’s worrying is for two months in a row, debt accruing interest has increased,” she said.

“With sky high interest rates that climb up to 24.99 per cent, credit card debt can be crippling.

“As the Reserve Bank Governor, Philip Lowe, said on Friday, people shouldn’t just accept high interest rates – they should shop around.

“If you have credit card debt, you could save yourself hundreds of dollars by switching to a card with an interest rate under 10 per cent.

“On the RateCity database there are 15 credit cards with interest rates under 10 per cent, including two of the big four banks.

“Debit card spending is at a record high, despite the financial stresses of COVID.

“Although debit card transactions don’t accrue interest – it may still be hanging over people’s heads if they have used buy now, pay later,” she said.

Afterpay says 80 per cent of its customers link their account to a debit card

“Right now, many buy now, pay later customers will still be dealing with debt they racked up over the holidays,” she said.

“If you have credit card or buy now, pay later debt, make a plan to pay it off as quickly as you can.”

List of credit cards with interest rates under 10% on 


Card Name 

Purchase Rate 

Annual Fee 

Greater Bank  Visa Credit Card  5.95%  $49
G&C Mutual Bank Low Rate Visa Credit Card 7.49% $50
Auswide Bank Low Rate Visa Card  8.05% $50
American Express Low Rate Credit Card 8.99% $0 
Community First Credit Union Low Rate Credit Card 8.99% $40
Easy Street Financial Services Easy Low Rate Visa Credit Card 8.99% $40
MOVE Bank Low Rate Credit Card 8.99% $59 (waived in first year)
Defence Bank  Foundation Visa Card 8.99% $45
Bank Australia Low Rate Visa Credit Card 9.39% $59
Bank First Visa Platinum Credit Card 9.59% $99
Westpac Lite Card 9.90% $108
Commonwealth Bank of Australia Essentials 9.90% $60/$24 if opting for online statements
Australian Unity Low Rate Visa Credit Card 9.90% $59
Bank of us Visa Credit Card 9.99% $39
First Option Bank Ltd Low Rate Visa Credit Card 9.99% $48


Note: Greater Bank purchase rate increases to 9.95% in April. Bank First offers 0% on purchases in first 6 months. Defence Bank offers 3.99% purchase rate for 6 months.

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Learn more about credit cards

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

What is a balance transfer credit card?

A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card. 

How is credit card interest charged?

Your credit card will be charged interest when you don’t pay off the balance on your credit card. Your card provider or bank charges you the individual interest rate that is associated with your card, which is usually between 10 and 20 per cent. 

The interest will be added onto your bill each month or billing period if you don’t pay off the balance, unless you are in an interest-free period.

You will be charged interest on anything that hasn’t been paid for inside the interest-free period. Usually you will receive a notice on your bill or statement saying you will be charged interest so you have some form of notice before you’re charged.

How to calculate credit card interest

Credit card interest can quickly turn a manageable balance into unmovable debt. So being able to understand how interest rates translate into dollars is an important skill to acquire.

The common mistake people make is focusing on the credit card’s annual percentage rate (APR), which often sits between 15 and 20 per cent. While the APR does provide a rough idea of how much interest you’ll pay, it’s not entirely accurate.

This is because you actually accrue interest on your balance daily, not annually. So, you need to work out your daily periodic rate (DPR). To do this, divide your card’s APR by the number of days in a year (e.g. 16.9 per cent divided by 365, or 0.05 per cent). You can then apply this figure to the daily balance on your credit card.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

What should I do if my ANZ credit card has expired?

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/22, it is valid until 31 March 2022 and expires on 1 April 2022. Typically, you should have received a new credit card by that date, and you won’t have to request a new card. 

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well. 

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit card.

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.