“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 - last updated February 27, 2021

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?)
  • Apply By May 31, 2021
    Bendigo Bank Low Rate Credit Card

    0% p.a. balance transfer for 18 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 18 months and then 11.99% p.a. (2.00% balance transfer fee)
    11.99% p.a.
    $45
    -
    Compare
    Details
  • Bankwest Breeze Mastercard

    Enjoy 0% p.a on balance transfers for 26 months (2% BT fee applies) then 10.99% thereafter. No annual fee for the first year. Limited time only. Other fees, T&Cs apply. New Mastercard Breeze customers only.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 26 months and then 10.99% p.a. (2.00% balance transfer fee)
    10.99% p.a.
    $49 $0 in the first year
    -
    Compare
    Details
  • St.George Vertigo

    0% p.a. for 24 months on balance transfers requested at card application. No balance transfer fee. Rate then switches to applicable variable cash advance rate. First year annual card fee waived for the first year ($55 thereafter). Available to new cards only, Eligibility criteria and T&Cs apply. Offer ends March 2nd 2021. Mozo Experts Choice Balance Transfer Credit Card Winner 2020^.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 24 months and then 21.49% p.a.
    13.99% p.a.
    $55 $0 in the first year
    -
    Compare
    Details
  • Hot DealLimited time balance transfer offer
    Westpac Low Rate

    Enjoy 0% p.a. interest on balance transfers for the first 24 months. Get $200 cashback with $1k minimum spend on eligible purchases within 90 days of card approval. 55 interest free days and low on-going rate of 13.74% on all purchases.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 24 months and then 21.49% p.a. (1.00% balance transfer fee)
    13.74% p.a.
    $59
    -
    Compare
    Details
  • St.George Amplify Platinum

    Get 0% p.a. for 22 months on balance transfers requested at card application. 1.5% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. Bonus 0% p.a. on purchases for 7 months. Rate then switches to applicable variable purchase rate. Get your first year annual card fee waived for the first year ($99 thereafter). New cards only, Eligibility criteria and T&Cs apply. Offer ends March 2nd 2021.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 22 months and then 21.49% p.a. (1.50% balance transfer fee)
    0% p.a. for 7 months then 19.74% p.a.
    $99 $0 in the first year
    Amplify Rewards
    Compare
    Details
  • Apply By July 29, 2021
    Citi Rewards

    0% per annum for 30 months on balance transfers. No Annual Fee for the first year then $199 each year after. Complimentary International Travel Insurance.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 30 months and then 22.24% p.a.
    21.49% p.a.
    $149 $49 in the first year
    Citi Rewards Program
    Compare
    Details
  • Bank of Melbourne Amplify Platinum

    70,000 bonus Qantas Points (min $1,500 spend each month for 3 months). New cards only, Eligibility criteria and T&Cs apply. Offer ends 2nd March 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
    Compare
    Details
  • St.George No Annual Fee

    0% p.a. for 12 months on balance transfers requested at card application (1% balance transfer fee applies). Rate then switches to applicable variable cash advance rate. New cards only, Eligibility criteria and T&Cs apply. Offer ends March 2nd 2021.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 12 months and then 21.49% p.a. (1.00% balance transfer fee)
    20.74% p.a.
    $0
    -
    Compare
    Details
  • NAB Low Rate Card

    0% p.a. interest on balance transfers for the first 20 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 20 months and then 21.74% p.a. (2.00% balance transfer fee)
    12.99% p.a.
    $59
    -
    Compare
    Details
  • BankSA No Annual Fee

    0% p.a. for 12 months on balance transfers requested at card application (1% balance transfer fee applies). Rate then switches to applicable variable cash advance rate. New cards only. Eligibility criteria and T&Cs apply. Offer ends 2 March 2021.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 12 months and then 21.49% p.a. (1.00% balance transfer fee)
    20.74% p.a.
    $0
    -
    Compare
    Details
  • Bank of Melbourne Vertigo

    Get 24 months 0% p.a. on balance transfers requested at card application. No balance transfer fee. Rate then switches to applicable variable cash advance rate. Pay no annual card fee for the first year ($55 thereafter). New cards only, Eligibility criteria and T&Cs apply. Offer ends March 2nd 2021.

    Balance transfer rate
    Purchase rate
    Annual fee
    Rewards program
    Estimated savings
    0% p.a. for 24 months and then 21.49% p.a.
    13.99% p.a.
    $55 $0 in the first year
    -
    Compare
    Details
  • 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 Cards 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.