Finder personal finance expert Sarah Megginson said consumers were feeling the squeeze, spending more on cards and carrying more debt. (Source: Finder/Getty)
Australians are racking up credit card debt, with data showing people are spending more on their plastic and carrying more debt month to month. It’s sparked “alarm bells” from experts, as Aussies are hit with mounting interest charges.
Around 44 per cent of Australian credit card holders now have a balance that is accruing interest, Finder’s latest Consumer Sentiment Tracker found. With the Reserve Bank of Australia’s (RBA) average rate sitting at 18.61 per cent, this means people may be paying far more than they originally borrowed.
Finder personal finance expert Sarah Megginson told Yahoo Finance many households were struggling to stay ahead of repayments, as pressures like higher mortgage costs and rent increases eat into budgets.
RELATED
“Consumers are clearly feeling the squeeze, as they’re spending more on cards and carrying more debt month to month,” she said.
Credit card spending surged to $39.1 billion in September, Finder analysis of RBA data found, with purchases up 8.6 per cent over the past year. Shoppers made 324 million transactions during the month, averaging $3,194 per card.
Balances accruing interest, meanwhile, reached $20.5 billion, up 7.3 per cent year on year. The average cardholder now owes $1,674 on balances attracting interest.
Along with rising debt levels, the number of active credit card accounts also ticked up 0.6 per cent from last month and a year ago. It has now reached 12.2 million nationwide.
In October, data from consumer analytics firm Equifax found credit card applications had surged 14.4 per cent year on year.
With Christmas just around the corner, Megginson warned the country’s collective credit card bill could soon be hitting new highs.
“It’s better to face facts now and rein in spending then be stuck paying the price well into 2026,” she said.
“If you have an unpaid credit card balance and you’re struggling to repay it, you might be able to move the debt onto a new card with a 0 per cent balance transfer offer.
“This is a special interest-free offer for a limited period, usually between 12 and 24 months, where you can work to pay down your debt without new interest being added.”
Megginson encouraged Aussies to look at their spending and make sure their money was working for them.
“If you do a lot of credit card spending but you pay the balance in full each month, then make sure you’re getting rewarded with many incentive programs on offer,” she said.