Australians wiped an impressive $416 million off their collective credit card debt in July, likely using returns from the tax office to knock down their high interest debt.
While debt typically drops in July, this was the largest drop in dollar terms since October 2021, when COVID lockdowns were pushing households to put a priority on paying down their debt.
Credit card debt attracting | |
|---|---|
Amount - July 2026 | Monthly change |
$19.1 billion | -$416 million -2.1% |
Source: RBA credit card statistics, Jul 2026, released 7 Sept 2026, original terms, excludes commercial cards. Year-on-year analysis not available due to a series break in Nov 2025.
This drop, while impressive, still puts the national credit card debt at $19.1 billion, which, at an average rate of 18.67%, means collectively we’re handing over an estimated $9.7 million a day in interest charges.
Spending remains elevated post EOFY sales
The lull in spending we sometimes see in July did not materialise this time around, with spending remaining at elevated levels.
Across both credit and debit cards, the total spend in July was an eye-watering $89.9 billion – the third highest amount in RBA records behind March 2026 and June 2026.
Value of card transactions, July 2026 | |||
|---|---|---|---|
Amount | Monthly | Annual | |
Credit cards - | $29.7 billion | +$260 million +0.9% | +$1.1 billion +4% |
Debit cards | $60.2 billion | -$270 million -0.4% | +$5.5 billion +10% |
Total | $89.9 billion | -$10.0 million -0.0% | +$6.6 billion +8% |
Source: RBA credit card statistics, Jul 2026, released 7 Sept 2026, seasonally adjusted terms, excludes commercial cards.
Credit card account numbers continue to slide ahead of rewards card overhaul
The number of credit card accounts dropped for the eighth consecutive month, as some Australians opt out of credit card programs.
This slide is likely to pick up pace in the lead-up to 1 October as changes to rewards credit card programs push some customers into rethinking the merits of their card.
The RBA data shows 18% of credit card accounts were inactive in the month of July, or 2.1 million, which suggests many people are shelling out annual or monthly fees on cards they don’t need.
Number of credit card accounts: households | |
|---|---|
Amount - | 11.4 million |
Monthly change | -16,435 -0.1% |
Year-on-year change | -26,543 -0.2% |
Source: RBA, original terms, excludes commercial cards.
Households still buying at elevated levels
Canstar’s data insights director, Sally Tindall, says, “Australians have put their tax returns to work, clearing $416 million in interest-bearing credit card debt in a single month – the biggest dollar decline we’ve seen since October 2021.”
“Using a tax refund to clear high-interest debt is one of the best financial moves a household can make, especially with interest rates on credit cards averaging 18.67%.
“However, with $19.1 billion in credit card debt still attracting interest charges across the country, Australians are jointly paying an estimated $9.7 million every day to the banks in what should be avoidable interest.
“We sometimes see spending cool in July after the end of financial year sales, however, this hasn't happened this year. Total card spending across credit and debit reached $89.9 billion, up $6.6 billion compared to July last year, making it the third-highest monthly spending total in RBA records.
“Households are still buying at elevated levels, and while the country's ongoing inflation woes are partly to blame, discretionary spending continues to rise, clocking in at 7.8% in July, according to the latest ABS figures.
“The decline in credit card accounts has now stretched to eight consecutive months, with 16,400 accounts closed in July alone.
“The upcoming changes to rewards credit card programs set to take effect on October 1 will likely see this trend gain momentum, with increases to annual fees one of the key ways banks are planning to recoup the drop in revenue they earn from interchange fees.
“RBA figures show 2.1 million credit card accounts were completely inactive in July. That’s great if it meant someone wasn’t racking up more debt but not if the person was shelling out exorbitant fees for a card they don’t use.
“Now is an ideal time to audit your wallet, close unused cards, or switch to a lower-cost option.”
