Credit cards accruing interest still a major issue for Australians

18 January 2010

Australians average credit cards debt has remained relatively steady despite many claiming to be focused on reducing their personal debt. Latest figures from the Reserve Bank have shown that the average Australian credit card debt is at $3131.00 which is slightly higher than twelve months ago where the average balances was recorded at $3127.

Of significant value is the fact that 72 per cent of the current balance is accruing major interest charges as the balances were not paid off during the interest free periods. This is up one percent from the August figures.

This is compared to the August round of Reserve Bank figures which showed that indicated that while Australians were maintaining healthy spending habits, they were also making moves to reduce their personal credit cards debt. The average credit cards balance was still at $3,131.00 which is 0.1 per cent higher than August 2008.

However the festive season appears to have affected this trend which means that during the six months from August to January 2010, Australians returned to their credit cards to cover the festive season while also not making the same level of repayments they were in August.

August repayment figures for credit cards were higher in value but less in their frequency. Basically repayments showed a drop in the number of repayments made, yet the repayments themselves were for higher amounts, with the total credit cards repayments for the twelve months to August increasingly by 4.26 per cent.

For the same time period Australians owed $44.937 billion for all balances outstanding on credit cards and charge card balances for the month of August.

Debit Cards have gone from strength to strength with this branch of the industry posting some of the biggest increases in the entire August report, debit cards reported a massive 13.8 per cent rise in the number of purchases made with debit cards from July to August 2009. While debit card use is increasing, analysts say in dollar terms, credit cards still dominate the market.

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