Yahoo Finance Aussie credit card debt highest since 2021: 'Very ugly'
Aussies are turning to plastic to keep up with the rising cost of living and interest rates.
More Aussies are turning to credit cards to get by, with the country’s total credit card debt at its highest level since August 2021.
Australia’s total credit card debt attracting interest charges hit $17.76 billion in April, according to data released by the Reserve Bank, up $27 million, month on month.
RateCity research director Sally Tindall said some Aussies were reaching for the plastic to “keep themselves afloat amid a sea of rate hikes”.
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“As some households are doing everything they can to keep themselves out of the red, others aren’t thinking twice when they hit the shops,” Tindall said.
“If your credit card is your plan B, then it’s time to come up with a better solution. While it’s a quick fix now, with an average interest rate of 17.71 per cent, things can turn very ugly if you can’t clear that debt in full.”
Aussies also spent more on their credit and debit cards in April, with the value of transactions increasing by $411 million (0.6 per cent) to $73.33 billion in total.
Of that amount, $26.34 billion was spent on credit cards, with 12.55 million personal credit cards on record during the month.
The actual number of transactions was down 9 per cent compared to April last year.
Managing debt
If you are finding it difficult to manage your credit card debt, RateCity recommends calling your bank and asking to be put on their hardship program.
Let your other providers know you are in financial hardship too and see if you can switch to a cheaper plan or be put onto a payment plan.
Consider whether there are any ‘circuit breaker’ moves you can make to generate extra income - such as renting out a spare room or garage.
You can also get free independent financial advice by calling the national debt helpline on 1800 007 007.
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