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Stubborn credit card debt reaches $17.8 billion
The national total credit card debt has blown out to $17.8 billion in December, as Australians struggle to clear pre-Christmas spending on their cards.
11 Feb 2025
The national total credit card debt has blown out to $17.8 billion in December, as Australians struggle to clear pre-Christmas spending on their cards.
The RBA’s credit card statistics, released today for the month of December, showed debt accruing interest on personal credit cards rose by over $236 million (+1.3%) from the previous month and by more than half a billion dollars (+3.0%) compared to a year ago, in original terms.
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| Credit card debt attracting interest charges – personal cards | |||
|---|---|---|---|
| Amount | Monthly change | Year-on-year change | |
| Debt attracting interest charges | $17.8 bn | +$236.3 mil +1.3% |
+$525.9 mil +3.0% |
Source: RBA, released 7 February 2025, original data, excludes commercial cards. A series break recorded in June 2024 impacts the annual change.
Record credit card spending in December could make matters worse
Australians put a record $28.1 billion on personal credit cards in December – a rise of $96.3 million (+0.3%) from the previous month.
Across both credit and debit cards, the total amount spent was $80.8 billion, an increase of $882.5 million (+1.1%).
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| Total credit and debit card transactions in December 2024 | ||
|---|---|---|
| Amount | Monthly change | |
| Value of credit card transactions (personal cards) | $28.1 bn – highest on record |
+$96.3 mil +0.3% |
| Value of debit card transactions | $52.7 bn | +$786.2 mil +1.5% |
| Total (credit + debit) | $80.8 bn | +$882.5 mil +1.1% |
Source: RBA, prepared by www.canstar.com.au. Released 7 February 2025, seasonally adjusted data, excludes commercial cards.
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How much are Australians paying in interest on credit card debt?
The average credit card rate of those paying interest charges is an eye-watering 18.59% – the highest average on RBA records, which date back to 2019.
While those with variable rate mortgages are eagerly awaiting RBA cuts to inject relief into their budgets, cash rate changes are not typically passed on to credit card customers.
People with persistent credit card debt, instead, will have to take matters into their own hands if they want rate relief.
The Canstar.com.au database shows:
- 9 providers offer at least one credit card with a purchase rate below 10%, including Westpac (excludes 0% cards)
- 16 providers offer at least one 0% balance transfer credit card, including ANZ, NAB and Westpac.
- Personal loan rates start from 6.56%, for unsecured loans, based on a $5k balance.
Canstar.com.au data insights director, Sally Tindall, says, “Credit card debt accruing interest is on the rise on the back of pre-Christmas spending in a cost-of-living crisis.”
“With the value of credit card transactions also hitting a record high in December, the national addiction to credit card debt is likely to get worse, before it gets better.
“If you have dug yourself into a credit card hole, it’s worth getting on to it quickly. One of the first things to do is try and go cold turkey so you’re not adding to the debt. If that means taking the scissors to the card, then so be it.
“Sit down and work out a plan to pay the entire bill off in full as soon as humanely possible, rather than just paying the bare minimum and ignoring the interest charges piling up in the background.
“Consider switching to a lower rate option. Right now there are nine providers on Canstar that offer at least one credit card with an interest rate below 10 per cent, including from big four bank, Westpac.
“Another option is to switch to a zero per cent balance transfer credit card. These cards typically charge no interest on existing debt for up to 30 months, giving you a bit of breathing space to get your finances back on track.
“However, while balance transfer deals can seem like a white knight, they are usually full to the brim with traps that can potentially land you in more hot water if you’re not across the fine print and fail to pay off the debt within the honeymoon period.
“If you’ve got a mountain of credit card debt, and a rubber arm when it comes to spending at the shops, consider getting off the revolving debt treadmill by switching your balance to a personal loan. This option forces you to pay the debt off in full within a set timeframe, usually without the ability to add to the debt.
“Like credit cards, personal loans come in all shapes and sizes, and the rate you pay can often depend on your credit score, so it’s worth shopping around for a competitive loan before you apply.”
Compare products, monitor your credit score, track interest rate changes, and access the deals, download the Canstar app: www.canstar.com.au/app.
Cover image source: fizkes/Shutterstock.com
This article was reviewed by our Content Editor Alasdair Duncan before it was updated, as part of our fact-checking process.
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