Credit card debt soars as Aussies go on spending rampage
Australia’s credit card debt ticked up for the second month in a row, in a worrying sign some families may be resorting to the plastic to make ends meet.
Reserve Bank of Australia (RBA) data for the month of November found the total credit card bill attracting interest charges increased by $419 million to a whopping $17.3 billion.
RateCity.com.au research director Sally Tindall said Australians opened their wallets in November, spending a mammoth $75.7 billion on their debit and credit cards in just one month - the highest value of monthly transactions in the RBA’s records.
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“The Click Frenzy, Black Friday and Cyber Monday sales undoubtedly fuelled this surge as Australians stocked up ahead of Christmas,” Tindall said.
“While many people were buying essentials to save money in the months ahead, some shoppers could find themselves in hot water if they can’t pay their credit card balance in full by the time the next bill hits their inbox.”
Tindall said the record high in debit and credit card transactions came as Australia’s total credit card debt accruing interest rose for the second month in a row.
“Bad habits look to be creeping back as some households reach for the credit card to make ends meet. Many family budgets have been through the wringer over the last couple of months as the cost of just about everything continues to rise,” she said.
“While the credit card can help plug a hole in the budget at the end of the month, it’s a quick fix that can easily unravel when the bills start rolling in. It’s often hard to see any other way through the month, but there are options out there if you can’t pay the bills, other than reaching for the plastic.”
Tindall said there were a number of small things Aussies could do that could actually make a big difference in making your finances stretch further.
“Switching to cheaper brands at the supermarket, renegotiating your regular bills, selling things you don’t need around the house – these may all seem trivial but together the savings can really add up,” she said.
“If you do have credit card debt, consider moving it to a lower-rate card or personal loan, where you are forced to pay the money off within a limited time with little capacity to add to it.”
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