Aussie credit card debt: is it dropping or jumping?
Tuesday 14 January 2020
Congratulations Australia, our collective credit card debt has dropped as a nation by over 8% in the last year.
According to official statistics released by the RBA, Australians’ balances accruing interest in November 2019 came to a total of $27.20 billion, $2.45 billion less than in November 2018.
Because of this reduction, it makes last November the lowest point for the country’s personal credit card debt since 2006, yep, that’s over a decade ago.
But that’s not the full story…
When you look a little closer, the data also reveals that the number of personal credit card accounts has dropped by almost 6.5%, meaning that debt per credit card in 2019 remained relatively flat in comparison to 2018 with only a 1.96% drop.
“This data indicates that fewer Australian consumers are opting to use credit cards, with many choosing alternatives like buy now pay later,” Mozo Banking Expert, Peter Marshall, said.
“While credit debt has decreased, I’m not surprised plenty of people still reach for a credit card, whether it’s to collect reward points or just for the convenience they still offer.”
RELATED ARTICLE: Christmas credit card debt? Here’s a trick to help kick it!
So are you one of the many Autalians still carrying credit card debt? There may be a way to clear your debt sooner than you think.
What can I do to clear my credit card debt?
If you still have the shadow of credit card debt from last year looming over you, one option could be taking advantage of one of the many balance transfer offers on the market at the moment.
There are currently over 100 balance transfer credit cards in the Mozo database, with offers starting from three months all the way up to 26 months, many of which charge 0%.
But how much could a balance transfer really save you, you ask? Take this scenario for example...
Say you have $6,000 debt on your current credit card with an interest rate of 20%. If you transferred your balance to a card with 0% for 12 months, you’d have to pay $500 every month to clear your debt before the interest-free period is over.
However, if you stuck with your current credit card with a high interest rate, it would take you 14 months to pay down your debt, plus you’d end up paying $751 in interest. So it’d end up costing you in both time and money!
To calculate how much you could save, check out our Switch & Save Calculator where you can punch in your details and find out how much you’d keep in your pocket by changing to a balance transfer credit card.
After some balance transfer card options? Take a look at the table below or jump over to our balance transfer credit card comparison tool for even more!