Credit card debt back on the rise as spending hits new record highs

The nation’s credit card debt has jumped to $18.13 billion in March as Australians continue to struggle to get on top of their credit card bills, Canstar analysis of RBA data shows.

This is the highest level of personal credit card debt accruing interest since August 2021 and the fifth increase in the last six months, followed by four consecutive rises in October, November, December and January, and a slight drop in February.

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Source: RBA credit card statistics, March 2025, original data terms, excludes commercial cards.

As spending climbs, credit card strain is likely to intensify

The total value of credit card transactions in March increased by $382 million (+1%) compared to the previous month, as Australians continue to use their cards despite rising debt levels.

Overall, spending on both debit and personal credit cards rose by $981 million (+1%) in the month and a substantial $5.6 billion (+7%) compared to the same time a year ago.

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Source: RBA credit card statistics, personal cards, March 2025, released 7 May 2025, seasonally adjusted data.

Credit card debt exacerbated by people on higher rate cards

RBA data shows the average credit card rate over the past 12 months was an eye-watering 18.49%, which has seen Australians shell out an estimated total of just under $3.3 billion in credit card interest charges in the year.

However, this figure could have been almost halved if people switched to a lower interest rate of 10% – an estimated collective saving of around $1.5 billion.

Canstar research shows there are over 10 banks offering at least one credit card with a purchase rate under 10%.

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Source: canstar.com.au. Excludes interest-free cards and introductory purchase rate offers. One product chosen per provider. Table sorted in ascending order by purchase rate, followed by ongoing fee, followed alphabetically by provider. Auswide annual fee waived for customers under 25.

Stuck on the debt treadmill? Here’s what you can do

Canstar’s data insights director, Sally Tindall says, “It’s a worry to see credit card debt creeping back up to levels not seen since August 2021.”

“Credit card debt has risen for five of the last six months, suggesting many Australians are struggling to get off this debt treadmill.

“Unfortunately, this problem does not look like it will abate any time soon, with spending on credit cards hitting a new record high in the month of March as many Australians reach for the plastic to help make ends meet.

“Adding insult to injury, RBA data shows those with credit card debt are paying an interest rate that’s well over 18 per cent. At this kind of level, it’s no wonder many people are finding it impossible to get off the treadmill.

“If you’re carrying around persistent credit card debt, look for a circuit breaker. Switching to a low-rate card can bring you some near-immediate relief, and with more than 10 lenders offering cards with a rate under 10 per cent, there’s a decent amount of choice.

“However, know that switching to a low-rate card is really just a temporary solution. Try and find a way to plug the recurring holes in your budget and pay down the debt in full. A personal loan can potentially help you do this as it will force you to pay your debt back in a set timeframe without the temptation to add to it.

“Finally, remember that help is at hand if you need it and the National Debt Helpline is a good place to start. This free service can put you in touch with a financial counsellor who can help you make a plan to get the credit card monkey off your back for good.”

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