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$17 billion: Aussies turn to plastic under weight of RBA hikes

Aussies are reaching for their credit cards to make ends meet.

Credit card debt concept.
Credit card debt has risen for the fifth month in a row, with Aussies turning to plastic to get by. (Source: Getty/Associated Press)

Australia’s total credit card debt has risen for the fifth month in a row, as Aussies turn to plastic to make ends meet.

Data released by the Reserve Bank showed the total credit card bill attracting interest charges increased by $270 million to $17.75 billion in February - the highest level since August 2021.

RateCity research director Sally Tindall said some Aussies were starting to “crack under the pressure” of rising costs along with interest rate hikes.

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“Many families’ budgets have been pummelled from multiple fronts over the last few months as the cost of just about everything goes through the roof,” Tindall said.

“While the credit card can be a bridge to get through to the next pay day, it’s a band-aid solution that can quickly come unstuck.”

Aussies spent slightly less on their debit and credit cards in February, dropping by $435 million (0.6 per cent) to $72.71 billion, despite the rising costs of goods and services.

Of that amount, $26.02 billion was spent on credit cards, with 12.48 million accounts on record during the month.

While a credit card may seem like the only option to get you through, Tindall said there were other solutions available to combat the rising cost of living.

“Shopping around for supermarket specials, renegotiating your energy and other bills, and taking up any concessions and rebates you may be eligible for can all add up to big savings,” she said.

“If you are up to your eyeballs in credit card debt, pull the pin. One option is to switch to a personal loan, where you are forced to pay it back in regular chunks and avoid the temptation to rack up more debt.”

It comes as Aussies dip into their savings to get by, with the average Aussie withdrawing $2,365 from their accounts to pay for things like mortgage and rent repayments, everyday essentials and unforeseen emergencies.

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