Australians spent almost $25 billion on credit card purchases in June, despite rising cost-of-living pressures.
However, the tide appears to be turning, according to the latest research from RateCity.com.au.
Recent Reserve Bank of Australia figures found that, overall, the value of credit card purchases rose $39.1 million in June.
However, domestic credit card spending dropped $134.4 million, as Aussies tightened the belt amid the skyrocketing cost of living.
But the value of overseas credit card purchases jumped $173.5 million (up 15 per cent), month-on-month, as Australians travelled internationally.
“The tide appears to be turning for credit card spending, as rising living costs and interest rate hikes finally take a toll,” RateCity research director Sally Tindall said.
“While credit card spending rose overall in June, domestic spending on credit cards actually dropped by $134.4 million compared to the previous month.”
Tindall said that, up until now, data showed Aussies were spending up big at the shops, despite rising interest rates.
“These figures suggest people are finally putting the brakes on spending,” she said.
But the total amount of debt incurring interest grew for the first time in three months - up more than $32 million.
“The fear is that rising living costs will see people rely on their credit cards to help make ends meet,” Tindall said.
“While reaching for the credit card may plug the gap until your next pay, know that it’s a band-aid solution that can easily backfire, and quickly.”
Rising cost of living
The most significant price rises were in new dwelling purchases by owner-occupiers (+5.6 per cent), automotive fuel (+4.2 per cent) and furniture (+7.0 per cent).