Australian credit card interest costs reach a record high
Credit card debt collecting interest peaked at $33 billion in February.
Australian credit card debt collecting interest reached $33 billion in February this year, according to finder’s analysis of new RBA data. Released yesterday, the data revealed that this credit card debt was up from approximately $32.5 billion in January. The average individual credit card debt also reached $1,990, which is the highest it has been in two years.
This suggests that not only are Aussies using their credit cards instead of savings, they are also struggling to pay off their existing debts. It's difficult to pin point exactly why this is, but this increased debt could be a result of combined leftover balances from Christmas as well as more recent expenses.
This growing credit card debt is also likely connected to an increase in available credit limits. According to the same RBA data, the nation’s combined credit limit has reached an all time high of $153.5 billion, giving Aussie cardholders an average $9,258 to spend on plastic.
With almost $2,000 credit card debt, Aussie cardholders with an average purchase interest rate (16.93%) would have to pay $400 in interest before they could clear the debt over two years.
If you are struggling to pay off a credit card debt because of credit card interest, it might be time to consider a 0% balance transfer credit card. You can use these cards to transfer an existing debt to a new card that charges no interest for a promotional period. The length of the interest-free period will vary, but it can range from 12 to 26 months. For example, you can get 0% for 25 months with no balance transfer fee with the NAB Low Fee Platinum credit card (exclusive to finder), 0% for 25 months with the St.George Vertigo Platinum credit card and 0% for 18 months with the Virgin Australia Velocity Flyer card.
You'll still have to pay off your existing credit card debt, but you can do it without paying any additional interest costs. Not only could this save you hundreds or thousands of dollars, it could also free you from debt much sooner.
If you want to get your credit card debt under control, you can compare more cards with interest-free balance transfer offers on finder. You can also check out our round-up of balance transfer credit cards with long interest-free offers and no balance transfer fees this month.
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