Credit card repayment rate accelerates

Australians repaid their credit card debt at a much faster rate over the past year than they did at any other time in the recent past.

New Reserve Bank of Australia (RBA) figures show that repayments rose by 8.7 per cent between March 2009 and March 2010, compared with an average rise of 7.9 per cent over the previous five years.

In addition, the data showed that the value of credit card purchases rose by 12.2 per cent over the year – reaching $19.908 billion by March 2010 – yet balances rose by only 6.4 per cent.

According to the AAP, the increase in the average balance was slower than the total outstanding because the number of credit and charge card accounts rose by 1.6 per cent over the year to March.

The statistic suggests that more Aussies looked to compare credit cards and secure lower rates during the period. Last week, Stephen Roberts, chief economist at Nomura Australia, told Trading Room that the RBA’s recent interest rate hikes have caused a severe drop in consumer confidence.

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