Finder’s State of the Credit Card Market Report 2018 reveals that there are more credit cards in circulation than ever before
Finder's inaugural State of the Credit Card Market Report, released last week, shows that 2,779,225 of the 16,694,597 credit cards currently in circulation were added to the market in 2017. This extensive report contains a deep analysis of both Reserve Bank of Australia and finder.com.aui data. Here are some highlights:
How much do we spend?
Australians made 2.7 billion purchases on credit cards in 2017, spending a total of $315.6 billion. This is up from 2.5 billion purchases and a $302.8 billion spend in 2016. The value of the average purchase
has fallen from a high of $152 in August 2008 to $112 in December 2017, with Aussies spending $1,573 per month on average in 2017.
The average credit card balance currently stands at $3,170 with $1,903 of the balance costing the cardholder interest. However, Australians are getting better at paying of their debt as the average balance accruing interest is dow
How many Australians are taking cash out on credit cards?
Withdrawing cash from an ATM with a credit card is an expensive way to access quick funds as most credit card users will be charged a 2-3% cash advance fee and start paying interest at a higher rate as soon as their cash is withdrawn. Gambling, purchasing traveller's cheques and money orders, purchasing store value cards (such as gift cards), paying bank bills and making BPAY payments can also be
considered cash advances when processed via credit card.
What about debit cards?
The increased availability of EFTPOS terminals has led to a huge surge in the number of debit cards on the market. There are now 46 million debit cards in circulation. That’s 2.8 debit cards per credit card, and 2.5 debit cards per adult. The total value of purchases on debit cards is increasing at a faster rate than on credit cards.
In fact, a fnder.com.au projection of RBA data shows that debit card spending could overtake credit cards as soon as August 2018. The increasing ease of debit card use means that Australians are using them to pay for lower value items. The average purchase on a debit card has fallen from $66 in December 2008 to $50 in December 2017.
How is the uptake of plastic payment affecting old-fashioned cash and cheques?
Increased usage of both credit and debit cards has led to a sharp decline in the number of Australians withdrawing cash and writing cheques. A projection of data from the RBA by fnder.com.au reveals that despite many banks dropping ATM fees, ATMs could be a distant memory in Australia by 2036. The number of ATM withdrawals per month has fallen from a high of 78.4 million in December 2008 to just 51.5 million in 2017.
A similar forecast of cheque usage data from the RBA shows that cheques could disappear completely from circulation in Australia by the end of 2019.
Read the full report for more insights.
Graham Cooke's Insights Blog examines issues affecting the Australian consumer. It appears regularly on finder.com.au. Image: shutterstock.