Finder's Credit Card Report combines aggregate credit card data from the Reserve Bank of Australia (RBA) with Finder's Consumer Sentiment Tracker (CST) to better understand the challenges influencing Australian cardholder behaviour and attitudes.
The Australian credit card market is undergoing a revival. After a significant downturn between May 2017 and April 2022 – during which 3.6 million cards were removed from circulation – cost of living pressures have compelled Australians to reconsider their financial strategies.
Following 31 months of a below -1% cash rate, the RBA lifted its target 12 times between May 2022 and June 2023, increasing pressure on household budgets. Around the same time, the number of credit card accounts in Australia started to increase.
Since April 2022 Australians have opened over 356,000 new credit card accounts. In January 2024, Australia's credit card spending hit an all-time high of $35.3b. These changes correlate directly with the increasing cash rate and indicate that credit cards are becoming a vital component of financial management for many Australians trying to cope with rising living costs. From everyday groceries to mortgage repayments, they offer a flexible means to navigate tough financial periods.
This report will examine the factors driving the surge, the impact changing consumer behaviour is having on the credit card industry, and the future of the credit card market.
Credit cards are a notably costly form of borrowing and the shift towards reliance on them, spurred by the cost of living crisis, raises concerns.
Graham Cooke
Money expert
While Australians are using credit cards for more purchases than ever, they are also improving at managing their balances, with the total national balance accruing interest at a historic low.
Graham Cooke
Money expert
It seems as though relief may have come at just the right time for these consumers. The first interest rate cuts are expected as early as August with no further rises in sight. However, if the winds change, these cardholders cannot absorb much more financial stress.
Graham Cooke
Money expert
As credit cards already have requirements around disclosing rates, fees and other crucial details, the same requirement for BNPL should help consumers make informed decisions around what type of product they choose for payments.
Graham Cooke
Money expert
Amy Bradney-George – credit card expert
"Credit cards are a part of the financial landscape in Australia, and the research in this report shows that's not going to change anytime soon. What is changing, for the better, is that more people are managing their credit cards well. The amount of debt accruing interest on credit cards dropped significantly during the pandemic and has stayed below pre-2020 levels.
One outcome of more responsible credit card management is that more people are considering the potential value of rewards and other perks. Younger generations, too, are more open to credit cards now that the shine of BNPL has worn off – influenced by media reports of serious debt and the government's plans to officially regulate it as a credit product.
But there is still a dark side to credit cards. As the cost of living crisis has continued, some people have turned to credit as a way to make costs meet, particularly for essentials, which could lead to more financial stress in the long run."
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