Australians are getting better at repaying credit card debt
Aussies still rely on plastic, but we’re getting better at repaying our debts.
It looks like Australians are getting better at handling their credit card debt, according to recent research from finder.com.au.
It's no surprise that Australians love using credit cards. There are currently 16.7 million credit cards in circulation, amounting to almost one per adult in Australia. With these cards, the average Australian makes 30 credit card purchases a month. This totals to a whopping 227 million credit card purchases per month nationwide.
This high number of purchases can probably be attributed to the credit limits we have access to. Aussie cardholders have an average credit limit of $9,054 per card. But with 7.5 million credit card holders in Australia, this works out to over $20,100 worth of credit available to every cardholder.
While our dependence on credit is high, Australians are getting better at repaying their card bills. According to research by finder, Australians made a record $328 billion in credit card repayments in the last 12 months. This figure represents 54% of the total $606 billion spent on credit cards between May 2016 and April 2017.
While that leaves the bulk of our balance to pay off, repayments as a proportion of total balances have grown for seven consecutive years. In fact, credit card holders are paying off 10% more than they were in 2008. This responsible repayment behaviour could be a result of record low mortgage rates and a growing commitment to managing our credit card debt.
How can I get my credit card debt under control?
While this is good news, there is always room for improvement. If we’re paying off 54% of our credit card balances, 46% remains to grow with interest. To keep your interest costs to a minimum, make sure you’re sticking to a budget each statement period. Even if you have a credit limit of $10,000, that doesn’t mean you have to max out your card.
Instead, set yourself monthly budgets that you know you can repay (ideally in full). You’re only required to make a minimum repayment of usually 2% to 10%, but it’s wise to pay as much as you can before the due date. If you do struggle to repay your balance in full each statement period, you might want to consider a card with a low or 0% purchase rate.
If you need any more tips to get your credit card bill in control, check out our guide on credit card repayments for more information.