Aussies seem to be continuing to put their credit card spending on hold.
In fact, new data from the RBA reveals that Australia’s total credit card debt has dropped for the third month in a row, this time by $88.1 million.
The drop in this month’s figures is, at least partially, due to individuals using their tax return money to pay off their credit card debts.
The RBA recently released credit card statistics for August, and they indicate a decrease in the total value of credit card transactions for the month.
This is a positive sign, suggesting that Australians are not increasingly relying on their credit cards to manage the growing cost of living.
It’s worth noting that the number of credit card accounts has actually increased by nearly 16,000 compared to the previous month and by over 188,000 compared to the same time last year.
Credit card statistics: personal credit in August 2023
Note: commercial cards are excluded
| Amount | Monthly change | Year-on-year change | |
| Debt accruing interest | $17.48 billion | -$88.1 million | +$535 million |
| -0.5% | +3.16% | ||
| Number of accounts | 12.61 million | +15,961 | +188,081 |
| +0.13% | +1.51% |
Source: RBA, released 9 October 2023, original data, excludes commercial cards. Monthly change is July to August 2023, year-on-year change is August 2022 to August 2023.
RateCity.com.au research director, Sally Tindall, said:
“It’s brilliant to see Australians focused on clearing credit card debt.
Some people are likely to be taking advantage of the money back from their taxes to help wipe the slate clean.
It is also encouraging to see the number of credit card transactions dropped in August, despite the fact the number of credit cards is on the rise.”
Total value of transactions: personal credit and debit cards in August 2023
| Amount | Monthly change | Year-on-year change | |
| Value of debit card transactions (personal cards only) | $48.25 billion | +$518 million | +$2.87 billion |
| +1.09% | +6.32% | ||
| Value of credit card transactions | $26.67 billion | -$146 million | +$1.31 billion |
| -0.54% | +5.16% | ||
| Total | $74.92 billion | +$372 million | +4.18 billion |
| +0.50% | +5.9% |
Source: RBA, released 9 October 2023, seasonally adjusted data, excludes commercial cards. Monthly change is July 2023 to August 2023, year-on-year change is August 2022 to August 2023.
Tindall further said:
Many families are feeling the pinch of the rising cost of living and 12 RBA hikes, but are resisting the temptation to reach for the credit card.
However, these totals don’t tell the whole story.
Some households have undoubtedly used their credit card to plug a hole in their monthly budget.
If that’s you, put a priority on paying it back the very next month so the hole doesn’t become a sinkhole.
If you have credit card debt, take the time to work out how you’re going to pay it off in full.
The bank will give you a minimum repayment amount – make sure you ignore this and pay as much of your debt as you can if not all.”
We can assist you to determine what will work best for you and start planning for the lifestyle you want in retirement. Give us a call at 08 8211 7180 or send us an email at info@centramoney.com.au.
Article courtesy of Michael Yardney’s Property Update.