As we navigate through the complexities of modern finances, it's become increasingly clear that Australians are facing a growing challenge with credit card debt.

For the fourth consecutive month, the nation's credit card debt has surged, reaching $17.66 billion.

The Reserve Bank of Australia's (RBA) latest credit card statistics for March showed that total household credit card debt attracting interest charges had increased nearly $49 million from February and significantly by $375 million since November 2023.

This uptick in debt is particularly troubling given that March has traditionally been a month where spending stabilises, and debt levels typically decline post-Christmas festivities.

Australia’s credit card debt surged to $17.66 billion. Credit: Shutterstock

However, this year has bucked the trend, marking the first time since 2015 that debt has risen in March.

Sally Tindall, the Research Director at RateCity.com.au, has expressed alarm at this development.

‘For eight years, we’ve seen credit card debt decline in the month of March, but not this time around,’ she said.

‘We’re very used to seeing households pile up the debt over summer, but the fact that many are still struggling to reduce this debt in March is cause for alarm.’

‘A recent RateCity.com.au survey found almost one in seven credit card users were relying on their card to get them through to payday—a strategy that’s destined to fail, and quickly.’

‘Plugging a budget black hole with the plastic can put you on a debt treadmill that’s difficult to get off.’

‘If you are struggling with credit card debt, don’t put your head in the sand.’

‘Take the time to come up with an action plan that sees you clear the slate clean entirely,’ she advised.

The number of personal credit card accounts has also increased, with 12.68 million active accounts at the end of March, marking the 18th consecutive month of growth.

Although this is down from the peak in June 2017, when there were 15.45 million active accounts, the increase of almost 300,000 accounts since May 2022 indicated a reliance on credit that could be cause for concern.

Early this month, The Commonwealth Bank issued a warning to Australian borrowers about the likelihood of an upcoming interest rate rise, where the RBA confirmed it would hold interest rates at 4.35 per cent.

Key Takeaways

• Australians' credit card debt has risen for the fourth consecutive month, reaching a total of $17.66 billion.
• The March increase marked the first time in eight years that debt has risen, breaking the trend of post-Christmas spending declines.
• Experts cautioned that the continued rise in credit card debt, particularly post-Christmas, is alarming and may worsen due to interest rate decisions.
• RateCity.com.au Research Director Sally Tindall advised those with credit card debt to create an action plan to clear their debt and warned against using credit cards as a stopgap for budget shortfalls.

What do you think of this story, members? Let us know in the comments below.

 

[mylittletibbies]

So many people consider credit cards as "their" money and just never get it paid off.
I know quite a few people who actually have more than one credit card (one has FIVE)If you've got more than one you're in big trouble. One of these people actually pays their monthly card payments with another card.
So glad my mother taught me the only good debt is your mortgage and even then get that paid off as quickly as possible.
I have had my mortgage paid off since my early 40s and have no other debt, thank goodness
You will never get anywhere in life financially if you continually rely on credit.
Get those cards paid off asap and then cut them up.

 

[Col@45]

Very good advice

 

[mylittletibbies]

Credit is such a trap.
Recently had a conversation with my granddaughter and her partner about looking for a better deal on their mortgage as they were struggling. I did some research for them and actually found a loan 1% less, they were just too lazy to look, much easier to whinge and do nothing.
Anyway with a bit (or I should say a lot) of pushing by me they did change and we're excited about how much they saved.
Did they now do as I suggested
and try to keep paying the amount they were paying beforehand get the mortgage paid off much quicker.
No!! They were so excited about what they saved they decided they could afford a new car and went out and "borrowed"
$50,000 on a car.
They now have to pay more money each month, considerably more in fact, than what they said they were struggling to pay before.
I give up, there's no helping some people

 

[PattiB]

So many people get trapped into buying everything on credit and there are consequences. I grew up before the advent of credit cards so was used to saving for things. I still only buy what I can afford to pay for and this is how our son was raised. I was being pressured by a salesman one day years ago, to buy something on credit so I told him that my credit card was at home in the freezer so that it couldn’t be used. It wasn’t but the look on his face was priceless, I wished I’d had a camera to take a photo. It was long before photo taking smart phones.

 

[Dennis]

The question is how many people just pay the monthly debt?

 

[Rockyd]

That is why we need to retain cash money & get rid of cards. The banks have made so much money from the fees of all those cards. That is why the banks are going away from cash. They won't make as many millions of $

 

[mylittletibbies]

The question is how many people just pay the monthly debt?

Most of them from what I've seen.
Have stepdaughters who go to sales at Harbour Town, stock up on clothes they don't really need, because they're cheap.
Buy them on credit, just pay the monthly payment and end up paying a fortune for clothes, which in most cases were going cheap because they didn't sell, so not much of a bargain in the first place.
They just never ever get these cards paid off, as fast as they pay they go and spend again.

 

[David567]

No wonder the banks are raking in Billions. The stupidity of using a credit card to pay another credit card is just as crazy as you can get.

 

[GillyH]

Credit is such a trap.
Recently had a conversation with my granddaughter and her partner about looking for a better deal on their mortgage as they were struggling. I did some research for them and actually found a loan 1% less, they were just too lazy to look, much easier to whinge and do nothing.
Anyway with a bit (or I should say a lot) of pushing by me they did change and we're excited about how much they saved.
Did they now do as I suggested
and try to keep paying the amount they were paying beforehand get the mortgage paid off much quicker.
No!! They were so excited about what they saved they decided they could afford a new car and went out and "borrowed"
$50,000 on a car.
They now have to pay more money each month, considerably more in fact, than what they said they were struggling to pay before.
I give up, there's no helping some people

The 30 year old today want everything now, they aren't prepared to wait or save abit longer. So they just get more loans or put it on the credit card. BANKS love these people. As someone just mentioned the only good debt is your mortgage.

 

[June E]

A lot of people get into so much dept with cards all they can afford is the minimum monthly fee which means they never ever pay it off. I have a credit card which I use for bills and sometimes shopping online because it’s supposedly safer but as soon as I use it I transfer the money straight over it’s the best way in my opinion.

 

[Jo Piper3]

I have a credit card that was initially for car hire overseas. Haven't used it for years and the card balance is nil.

 

[JustinCredible]

I don't understand people at all. If I don't have money, I don't buy it (except of course my house).
I already pay tax on my money. I have NO credit cards. Why would I want to pay interest on credit card debt and the fees and charges on using digital payments too?
I use cash all the time unless I'm doing an online purchase.
Hint: ING bank refund all ATM fees when withdrawing cash and refunds overseas currency transaction fees for online purchases.
No, I do not get any kickbacks for mentioning ING.

 

[NotNats]

Wonder if this happened to anyone else.
Back in 1994 when my husband decided to build a bigger house on our land, he had over $60,000 in his ANZ account. He got a mortgage via ANZ but had to use his saving first (typical of most banks back then).
The ANZ convinced him that the best practice for the mortgage was for him to get a 2nd credit card for me. Up till then I never wanted a credit card or owned one. I hated using other people's money as I called it (still do hate it).
Then instead of us paying everything by cash (as we all did back then), that we put everything on the 2 credit cards. Then at the end of each month the credit card was paid in full (but they hoped we didn't or that we just paid the minimum payment) from the savings account where our wages went too.
This was supposed to help us earn more interest on our savings account and to offset the mortgage. After a few years we realised this was the worst thing for us to do. But the Bank loved it as it meant we didn't need to enter the branch as much & they didn't have to hold as much cash (in vault).
Within 2 years we ended up going back to how we did things beforehand, and the credit cards were rarely used. That's also when we found out we could not close the credit cards while the mortgage was active. Sad thing was that ANZ also convinced my husband when we needed any extra money (new car or other large ticket items), not to apply for a separate loan but to remortgage the home loan. This was another trap that they set.
Finally in 2011 we became mortgage free. And in 2015 I finally got rid of my credit card (Huby passed away in 2017). I am now credit card free, but the damage was done.

To me this back in the 90's was the beginning of the downfall of cash and staffed branches.

 

[MIZMAC]

I have always gone with if you can't pay it today don't buy it. Credit card is not money in hand. I use a debit card when necessary. Money must be in the bank no interest payments.

 

[Rob44]

Chuck that mobile phone in the deep blue sea and burn that credit card. Banks love our unrestricted spending habits. ITS HOW THEY MAKE BILLIONS OF PROFIT EVERY QUARTER. Unless you have an overdraft, use cash and paper cheques which will get bounced if you don't have the money in the banks.

Why do you think banks are now not issuing cheque books? It costs them profit and it means we control our spending.

 

[Rob44]

Wonder if this happened to anyone else.
Back in 1994 when my husband decided to build a bigger house on our land, he had over $60,000 in his ANZ account. He got a mortgage via ANZ but had to use his saving first (typical of most banks back then).
The ANZ convinced him that the best practice for the mortgage was for him to get a 2nd credit card for me. Up till then I never wanted a credit card or owned one. I hated using other people's money as I called it (still do hate it).
Then instead of us paying everything by cash (as we all did back then), that we put everything on the 2 credit cards. Then at the end of each month the credit card was paid in full (but they hoped we didn't or that we just paid the minimum payment) from the savings account where our wages went too.
This was supposed to help us earn more interest on our savings account and to offset the mortgage. After a few years we realised this was the worst thing for us to do. But the Bank loved it as it meant we didn't need to enter the branch as much & they didn't have to hold as much cash (in vault).
Within 2 years we ended up going back to how we did things beforehand, and the credit cards were rarely used. That's also when we found out we could not close the credit cards while the mortgage was active. Sad thing was that ANZ also convinced my husband when we needed any extra money (new car or other large ticket items), not to apply for a separate loan but to remortgage the home loan. This was another trap that they set.
Finally in 2011 we became mortgage free. And in 2015 I finally got rid of my credit card (Huby passed away in 2017). I am now credit card free, but the damage was done.

To me this back in the 90's was the beginning of the downfall of cash and staffed branches.

ANZ? Just another mob of highwaymen and foot-pads.

 

[Luckyus]

One thing we don't have and at my age there's very little, they can entice me with

 

[IAN3005]

So many people consider credit cards as "their" money and just never get it paid off.
I know quite a few people who actually have more than one credit card (one has FIVE)If you've got more than one you're in big trouble. One of these people actually pays their monthly card payments with another card.
So glad my mother taught me the only good debt is your mortgage and even then get that paid off as quickly as possible.
I have had my mortgage paid off since my early 40s and have no other debt, thank goodness
You will never get anywhere in life financially if you continually rely on credit.
Get those cards paid off asap and then cut them up.

A $2,000 credit card debt that you pay the minimum amount of each month will take you 2 1/2 tears to pay off.
The increase in debt does not surprise me in the least.... I expected it as people don't know the difference between"WANT" & 'NEED'.

 

[bluetang]

That is why we need to retain cash money & get rid of cards. The banks have made so much money from the fees of all those cards. That is why the banks are going away from cash. They won't make as many millions of $

Yes the banks don't make money on cash, it just cost them money eg. wages to count and Armourguad
to deliver and or collect