Australia’s credit card debt set to tip $52 BILLION by end of 2014
- Australian cardholders are making more frequent and bigger transactions than a decade ago
- National credit card debt has almost doubled in the last 10 years
- creditcardfinder.com.au urges Australians to act now to keep debt low
For immediate release on March 17, 2014, Sydney: Australia’s credit card debt is set to hit more than $52 billion by December 2014 according to Australia’s biggest credit card comparison website creditcardfinder.com.au*, prompting a warning against the dangers of relying on plastic.
Australians are using credit cards significantly more than they were a decade ago and despite a slowdown in growth, the nation’s total credit card debt is creeping higher.
The latest Reserve Bank of Australia (RBA) figures (released March 12, 2014) analysed by creditcardfinder.com.au show there were 166 million transactions carried out on credit cards in January this year worth over $22 billion. That’s almost double the use a decade ago, with 89 million transactions in January 2004, worth $11 billion.
The national credit card debt which now stands at $49 billion, which is almost double (88 percent) the $26 billion balance from January 2004.
During that same time, the number of credit card accounts increased by 42 percent and balances and average debt per card has also grown. The average balance per credit card is now one third (32 percent) larger than it was 10 years ago ($3,147 in January 2014 compared to $2,377 in January 2004).
Credit card debt at January 2014 compared to 10 years ago:
|January 2014||January 2004||Difference (percentage)|
|Total national credit card debt||$49.1 Billion||$26.1 Billion||+ 88%|
|Number of accounts||15.6 million||11.0 million||+ 42%|
|Total value of transactions||$22.2 Billion||$11.3 Billion||+ 97%|
|Average balance||$3,147||$2,377||+ 32%|
|Average value of transactions per card||$1,424||$1,026||+ 39%|
Source: creditcardfinder.com.au, Reserve Bank of Australia
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Michelle Hutchison, Money Expert at creditcardfinder.com.au, said that Australia’s reliance on plastic is
on a worrying upward trend.
“The number of transactions is up, the value of transactions has grown and there are also more credit card accounts than there were 10 years ago. That’s more people, spending more money on their credit cards and more often, which holds a concerning outlook for Australia’s credit card debt levels.
“We’re also spending 39 percent more per credit card, with $1,424 spent in January 2014 on average per card compared to $1,026 in January 2004.
“If this trend continues, we’re expecting the total credit card debt will hit over $52 billion by the end of the year. We need to reverse this kind of spending behaviour if we want to put a dent in the $49 billion worth of national credit card debt.”
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Australia is set to spend a total of $277 billion on their credit cards in 2014, 76 percent more than in 2004.
“If cardholders are serious about reducing their debt, they need to look at their spending habits and the rates they’re being charged on their cards,” said Mrs Hutchison.
“While there are some cards with ridiculously high rates of up to 25.9 percent for a cash advance, there’s also a lot of competition between providers. On creditcardfinder.com.au, there are cards with ongoing purchase rates as low as 8.99 percent as well as several with no interest on new purchases and balance transfers.
“In fact, creditcardfinder.com.au’s database lists over 50 zero percent balance transfer cards lasting up to 24 months.
￼￼￼￼“With deals like these, there’s no reason anybody should be paying too much in interest. Cardholders
￼are finally on the right track, but they need to speed things along – by comparing their rates and trying to find better credit cards.”
￼￼￼* Experian Hitwise 2013
For further information
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.
finder.com.au is Australia's most visited comparison website and has helped over 4.8 million Australians find better credit cards, home loans, life insurance, shopping deals and more since 2006. finder.com.au compares 250 credit and debit cards from 31 providers, over 300 home loan products, and information from 13 life insurance providers as well as online shopping promo codes, mobile phone plans, travel insurance and more. One Australian every five minutes is using finder.com.au to find better (Source: Google Analytics).