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.

 

[IAN3005]

'Expert warn it could get worse'...... let me tell you IT will get worse..... worse than you could ever imagine and banks will rake it in.......
Used wisely they are a means of using the 30 days (used to be 55 days) to earn interest on your savings.

 

[Luckyus]

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'.

When in fact, it's only the needy who wanty?

 

[Babbie]

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.

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.

I like my credit card, it is convenient. No one forces anyone to have a credit card. If people choose to spend beyond their means, that is their problem, not the banks. The banks make it very clear that if the amount is not paid in full by the due date, there will be interest to pay. We all have choice and individual responsibility.

 

[IAN3005]

When in fact, it's only the needy who wanty?

They obviously haven't heard the saying "cut your coat according to the cloth"

 

[Squizzy1]

People have no money, which is contra to what the RBA says that people are

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.

coping well.
Personal debt in Aust is around treble the National Debt, look it up.

 

[Squizzy1]

Ahh but the RBA says we are coping well, with personal debt treble the National Debt.

 

[Greg350]

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 $

You do realise you don't need credit cards for a cash free society? Ever heard of debit cards, cards that access YOUR money in the bank.
Banks are going away from cash because that's what consumers want. Just because YOU don't want a card does not mean the majority don't.

 

[mylittletibbies]

You do realise you don't need credit cards for a cash free society? Ever heard of debit cards, cards that access YOUR money in the bank.
Banks are going away from cash because that's what consumers want. Just because YOU don't want a card does not mean the majority don't.

Don't kid yourself the banks are doing this because it's what consumers want. They are only interested in one thing and that's PROFITS.
Customers want banks to stop closing branches, stop getting rid of ATMs, stop being charged fees to access their own money
Do banks care about that, NO of course they don't. It's nothing to do with what customers want, they don't give two sh..s what customers want.
People want access to cash when they need it, e.g. pocket money, markets, private sales,the chance to still be able to shop when computers crash.
No need to get rid of cards, there is a place for both, as there has been for years.
No need to rock the boat, just to bow to the anti privacy govt. and money hungry banks.

 

[IAN3005]

You do realise you don't need credit cards for a cash free society? Ever heard of debit cards, cards that access YOUR money in the bank.
Banks are going away from cash because that's what consumers want. Just because YOU don't want a card does not mean the majority don't.

Didn't say I did not want a credit card..... I use mine to glean every cent I can from the bank at no charge....