Credit card debt soars
National credit card debt has almost doubled in the last 10 years and is set to hit more than $52 billion by December 2014.
According to comparison website creditcardfinder.com.au, the latest Reserve Bank of Australia (RBA) figures show Australia’s national credit card debt now stands at $49 billion, an 88 per cent increase on the $26 billion balance in January 2004. Furthermore, there were 166 million transactions carried out on credit cards in January this year worth over $22 billion - almost double the use a decade ago, with 89 million transactions in January 2004, worth $11 billion.
During the same period, the average balance per credit card grew 32 per cent to $3,147 in January 2014 compared to $2,377 in January 2004 and the number of credit card accounts increased by 42 per cent.
Michelle Hutchison at creditcardfinder.com.au said the increase in the number and value of transactions meant Australia’s reliance on credit cards was reflecting a worrying upward trend.
“That’s more people, spending more money on their credit cards and more often, which holds a concerning outlook for Australia’s credit card debt levels.
“If this trend continues, we’re expecting the total credit card debt will hit over $52 billion by the end of the year. We need to reverse this kind of spending behaviour if we want to put a dent in the $49 billion worth of national credit card debt,” she said.
With Australia predicted to spend a total of $277 billion on their credit cards in 2014 - 76 per cent more than in 2004 - Hutchison urged people to act now to keep debt low.
“If cardholders are serious about reducing their debt, they need to look at their spending habits and the rates they’re being charged on their cards,” she said.
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