Australian’s breaking their unhealthy relationship with credit card debt

The amount of credit card debt accruing interest for Australia’s has slid to the lowest level in 11 years with signs that people are beginning to shake the burden of high interest debt.

Credit card statistics from the Reserve Bank of Australia 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 also fallen 3.1 per cent year-on-year with 470,088 fewer active accounts than there were in April 2018.

However, today’s statistics show people with credit cards are using them more with purchases increasing by 6.45 per cent year-on-year, while the value of purchases rose 2.2 per cent.

RateCity.com.au research director Sally Tindall said it was great to see Australians make headway 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.

“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.”