There are 13,506,101 credit cards in Australia as of December 2023, netting a national debt accruing interest of $18.1 billion.
For many Australians, managing credit and debt through credit cards is a common element of their day-to-day money habits, while for others a few bad mistakes have resulted in a downward debt spiral. But what does the state of Australia's credit card use actually look like?
How many people have a credit card and how much do they spend?
The count of credit cards in Australia saw a consistent decline since 2018, with this trend persisting throughout 2019, 2020 and 2021 until hitting a low point of 13,149,442 in April 2022. However, a notable turnaround began from that point onward, marked by a gradual recovery. By December 2023, the number of credit cards had rebounded to 13,506,101, underscoring a renewed sense of stability within the Australian credit card market.
Could Australians manage their finances without a credit card?
According to the Finder CST survey on June 2023, it was revealed that 30% of Australians rely on credit cards to effectively manage their finances. Interestingly, this dependence slightly skewed towards women, with 31% of women leaning on credit cards, compared to 29% of their male counterparts.
How many people who applied for a credit card have been rejected?
While 13.5 million Australians currently have a credit card, some have run into difficulties accessing this form of credit. Of those who have been denied, unsteady income (34%) is the top culprit, followed by having a bad credit score (27%) and having too much debt (23%).
What are the main reasons for an Australian to apply for a credit card?
Emergencies, rewards and big-ticket items among top reasons for taking out a credit card.
Where do Australians turn if they can't pay off their credit card debt?
Worryingly, only half of Aussies who find themselves buried under out-of-control credit card debt would be able to dig themselves out.
In the December 2023 Finder CST survey, it was revealed that 13% of Aussies had fallen behind on repayments by 30 days or more. Notably, 2% of cardholders faced a more concerning delay of over 60 days.
How have credit card interest rates compared to the RBA Cash Rate?
According to the Reserve Bank of Australia (RBA), the average standard credit card rate is 20.07%. Between 1995 and 2010, the average credit card rate moved up and down with the cash rate. Since 2010, the average credit card interest rate remained steady while the cash rate fell dramatically. Even following a series of 12 dramatic cash rate increases over the last 2 years, the credit card interest rate has remained relatively stable.
So how can Australians stay on top of their credit card debt?
What do the experts say?
Amy Bradney-George, credit card expert at Finder
"You can use a credit card repayment calculator to work out a payment plan that's affordable for you. Some credit card providers (including CommBank, Westpac and American Express) also offer instalment plans that let you pay off some or all of your balance in equal instalments over a fixed period of time, which can make it easier to budget for them."
Taylor Blackburn, personal finance specialist at Finder
"The best way to stay on top of your credit card debt is to only spend within your means. Credit cards aren't just free money, so be careful with your spending habits and avoid purchasing things you don't really need. If you do find yourself in debt, you can buy yourself some extra time by taking out a 0% balance transfer credit card and consolidating your debt. The less you pay on interest, the more you can put towards actually paying off your debt."
Graham Cooke, head of consumer research at Finder
"There are 2 very different types of credit cards on the market in Australia – cards with low interest rates and credit cards with rewards. Both are fantastic but both are aimed at very different customers. Start with a basic card, with a low rate. Only if you can successfully spend on this card and pay it off in full every month should you consider upgrading to a rewards card. If you do, however, the rewards can be great."
How has the way Australians use credit cards changed over the years?
The table below depicts the average number of accounts per year, the total number of purchases and total purchase spend nationally, the average balance per card and the proportion of that balance accruing interest.
The Future of Credit Cards
Finder's newest report, The Future of Credit Cards, delves into the state of Australia's credit card market. We examine the impact of COVID-19 on the credit card environment, how consumer demands are evolving and the trends shaping the future of lending. We look at generational differences in the demand for credit, in particular the rise of buy now pay later among younger consumers. Finally, Finder's experts share their thoughts on how credit cards are changing and the future of the industry.
Download the full report here.
How does the US compare?
Due to differences in population, it's no surprise that there are 551 million more credit card accounts in the US than circulating credit cards in Australia. The average American credit card debt is also 26.6% larger, with $3,911 spent on the average card each month. To see more statistics on American credit cards, head to this page.
Are you a journalist or researcher? If you need any further data or custom research, please contact Graham Cooke.