Australian card holders are chipping away at their credit card debt at near historic levels, with new figures showing that the country as a whole reduced its outstanding card balance by $260 million over the last year.
The analysis from the Australian Banking Association (ABA) revealed the most recent debt drop was, in fact, just the third occurrence in the country's history - though the total credit card debt balance remains at a staggering $52.2 billion.
“Overall credit card holders are becoming more financially savvy, taking care to repay debt and keep their interest costs low,” said Australian Banking Association Chief Economist, Tony Pearson.
“Last year Australians spent nearly $325 billion on credit cards, but repaid $341 billion, $16 billion more than they spent.”
Australians also appear to be reigning in the amount they spend on their cards, with RBA data suggesting that card holders are using just 34% of their available card limits - the lowest proportion for fifteen years.
“This means people are now paying interest on a smaller portion of their balance, which helps to keep credit card costs manageable,” said Pearson.
“Further evidence of prudent use of credit cards is the total amount accruing interest on credit cards remains well below the peak in early 2012, with the proportion of the balance on which interest is paid (61%) close to a record low.”
Mr Pearson urged Australians to shop around when looking for a card in order to find one that suits their needs, and to keep track of their spending in order to stay ahead of repayments.
If you’re looking for your own way to reduce credit card debt, one solution could be take advantage of a balance transfer offer in which you could pay off your balance with a 0% interest rate for a fixed period. For a more detailed explanation of balance transfers check out this guide, or to start comparing balance offers head over to the Mozo credit card comparison hub.