“A concerning trend” - Mozo finds 4 in 10 credit card holders racking up debt on everyday expenses

Credit cards are typically used to fund items that Aussies can’t wait to have, but according to new Mozo research, 4 in 10 credit card holders are using their plastic to pay for everyday expenses, like groceries and bills.

And with this spending came the all too familiar feeling of debt, as the research also revealed,that more than half of credit card holders have experienced credit card debt at one stage, with 1 in 5 continuing to hold long-term debt.

“Our survey into Australia’s credit card habits has uncovered a few worrying trends with around 20% of cardholders carrying credit card debt for three years or more. Of those weighed down by long term credit card debt, 1 in 10 have carried it for more than a decade,” said Mozo Director, Kirsty Lamont.

Big ticket items like holidays and new gadgets accounted for 37% of debt, while 33% came from entertainment expenses and trendy clothes and shoes, but according to Lamont, it’s our weekly grocery shop that’s a cause for concern.

RELATED: Westpac and ANZ refund more than $21 million to credit card customers

“The surprising thing is that the majority of cardholders aren’t racking up credit card debt on life’s luxuries like lavish holidays, designer threads or the latest gadgets but on the everyday essentials like groceries or bills.”

“Australians putting their fixed expenses on credit is a concerning trend, and one which is likely to worsen in the near future if the cost of living continues to skyrocket and national incomes trail behind.”

When asked about the possibility of blasting debt once and for all, a massive 45% revealed that they couldn’t afford to do it. Other reasons included ‘other money priorities’ (30%), forgetting to pay (8%) and procrastination (8%). 

“Owning a credit card can make it easy to spend beyond your means. It’s becoming apparent that many cardholders are digging themselves into a trap they can’t afford to get out of, all the while being punished by interest rates around the 17% mark,” says Lamont.  

RELATED:  Bitcoin Blunder - Banks ban buying cryptocurrency with credit cards

But the news wasn’t all bad, as 96% of Aussies had hope that they’d completely pay off their debt at some point -  60% of card holders even revealed that within the next 6 months they’d be debt free. 

“It’s encouraging to see that many credit card debt holders have the intention of getting financially fit over the coming year. The key is to look at your spending habits and create a plan to knock out your debt,” says Lamont.

Mozo’s top tips for clearing credit card debt 

Credit card comparisons on Mozo - rates updated daily

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure.
Balance transfer calculator: how much money could you save?
1
2
3
4
I need to transfer
I can repay
each month
My current interest rate is
% p.a.
My current annual fee is

Transfer amount:

$

Monthly repayment:

$

Current interest rate:

%

Current annual fee:

$

Change my values

We've updated the table to show your savings!(how are they calculated?)
  • placeholder
    HSBC Platinum Credit Card

    0%p.a. on balance transfers for 36 months with no balance transfer fee. Terms and Conditions apply. Mozo Experts Choice Premium Rewards and Balance Transfer Platinum Credit Card Winner 2020.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 36 months and then 21.99% p.a.
    19.99% p.a.
    $129 $29 in the first year
    Rewards Plus
    Go to site
    Details
  • Apply By 30 June 2021
    placeholder
    Bendigo Bank Low Rate Credit Card

    0% p.a. balance transfer for 24 months (Reverts to 11.99% p.a). Low annual fee of $45 and no fees for additional cardholders.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 24 months and then 11.99% p.a. (2.00% balance transfer fee)
    11.99% p.a.
    $45
    -
    Go to site
    Details
  • placeholder
    Bankwest Zero Mastercard

    No annual fee and up to 55 days interest free on purchases. 0% p.a. on balance transfers for 26 months and then 14.99% p.a. thereafter (2% BT fee applies).

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 26 months and then 14.99% p.a. (2.00% balance transfer fee)
    14.99% p.a.
    $0
    -
    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2020
    American Express Qantas Ultimate Card

    Receive 120,000 bonus Qantas Points plus 120 Status Credits when you apply, are approved, and meet the minimum spend criteria of $4,500 in the first 3 months. T&Cs apply. Available to new Card Members only.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    No current offer
    20.74% p.a.
    $450
    Qantas Frequent Flyer
    Go to site
    Details
  • Apply By 7 September 2021
    placeholder
    Westpac Low Rate

    Enjoy a super low rate of 13.74% with 55 days interest free plus 0% balance transfer for up to 28 months at 1% BT fee. No annual card fee for the first year, $59 thereafter.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
    13.74% p.a.
    $59 $0 in the first year
    -
    Go to site
    Details
  • placeholder
    Great Southern Bank Low Rate Credit Card

    0% balance transfer rate for 20 months and up to 55 interest free days. No annual fee for the first year and $49 after. Mozo Experts Choice Balance Transfer Platinum Credit Card Winner 2020^

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 25 months and then 21.74% p.a.
    11.99% p.a.
    $49 $0 in the first year
    -
    Go to site
    Details
  • placeholder
    St.George Vertigo

    0% p.a. for 28 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. New cards only, Eligibility criteria and T&Cs apply. Offer ends September 28th 2021.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 28 months and then 21.49% p.a.
    13.99% p.a.
    $55
    -
    Go to site
    Details
  • placeholder
    Bankwest Zero Platinum Mastercard

    This card boasts no annual fee and the option to pay with the Bankwest Halo payment ring. Introductory 0% p.a. on balance transfers for 26 months and then 14.99% p.a. thereafter (2% BT fee applies)

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 26 months and then 14.99% p.a. (2.00% balance transfer fee)
    14.99% p.a.
    $0
    -
    Go to site
    Details
  • placeholder
    St.George Amplify Rewards Platinum

    80,000 bonus Amplify Points, worth up to $350 in eGift Cards (min $3,000 spend within 90 days. 0% p.a. for 15 months on balance transfers requested at card application (1% BT fee). New cards only, Eligibility criteria and T&Cs apply. Offer ends 28th September 2021.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 15 months and then 21.49% p.a. (1.00% balance transfer fee)
    19.74% p.a.
    $99
    Rewards
    Go to site
    Details
  • placeholder
    NAB Low Rate Card

    0% p.a. interest on balance transfers for the first 26 months (2% fee), plus a low ongoing purchase rate after that means you can spend with confidence. There's also up to 55 interest free days on purchases to help you manage your budget better.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 26 months and then 21.74% p.a. (2.00% balance transfer fee)
    12.99% p.a.
    $59 $0 in the first year
    -
    Go to site
    Details
  • placeholder
    Bank of Melbourne Amplify Rewards Platinum

    Earn 60,000 bonus Qantas Points (min $3,000 spend in the first 3 months). New cards only, Eligibility criteria and T&Cs apply. Offer ends 28th September 2021.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 15 months and then 21.49% p.a. (1.00% balance transfer fee)
    19.74% p.a.
    $99
    Qantas Frequent Flyer
    Go to site
    Details
  • placeholder
    St.George Amplify Rewards Signature

    Earn up to 200,000 Bonus Amplify Rewards Points over 2 years (100k yr 1, 100k yr 2) when you spend $12k on eligible purchases each year. New cards only, Eligibility criteria and T&Cs apply. Offer ends 28th September 2021.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 15 months and then 21.49% p.a. (1.00% balance transfer fee)
    19.74% p.a.
    $279
    Rewards
    Go to site
    Details
  • placeholder
    Bankwest Qantas Platinum Mastercard

    Earn up to 0.75 Qantas Point per $1 spent on eligible purchases. No foreign transaction fee.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    2.99% p.a. for 9 months and then 20.49% p.a.
    20.49% p.a.
    $160
    Qantas Frequent Flyer
  • Let go of the plastic - Cut off the problem at the source by going cold turkey with any plastic spending.
  • Try to pay more than the minimum - If you are unable to pay the full balance amount, make sure to at least pay more than the minimum repayment.  
  • Use any spare funds - Take any spare cash you come into contact with, such as a tax return or gift and put it towards your credit card balance.
  • Take up a side hustle - Stay on top of your repayments by considering a side job, like a weekly Uber shift.

Having a balance transfer card might also be your answer for clearing credit card debt, as you’ll be able to gradually pay off your debt without any interest for up to 24 months. You can check out Mozo’s credit card comparison tool to compare some of the latest deals on balance transfer credit cards.

^See information about the Mozo Experts Choice Credit Card Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.