Australians are racking up higher credit card bills as the cost of living bites, with the latest RBA data showing four straight months of rising debts.
Despite an economy-wide paying down of credit card debts during the COVID lockdowns last year, Australians have since begun to swipe and tap their cards in greater numbers, pushing up their outstanding bills.
Prices for petrol, electricity, food and rents are going up, and soon mortgage bills will join the mix, putting even more pressure on families.
Debt-accruing interest rose 0.3 per cent in February to $17.4 billion, the RBA said on Thursday, although is still 11.4 per cent lower year-on-year.
RateCity research director Sally Tindall said it’s the fourth straight month that credit card debt has ticked upwards, starting in December last year.
“While the rises have, so far, been relatively moderate, it’s a red flag some Australians are doing it tough,” she said.
“Australians made huge headway into credit card debt over the last two years. It’s agonising to see some of that hard work come undone.”
The higher debts come amid rising household budget pressures, with the increasing cost of living currently outpacing wages growth.
“You only have to go to the petrol station or the supermarket to know that inflation is on the rise and that’s putting pressure on some family budgets,” Ms Tindall said.
“Families who are struggling to make the monthly budget add up should search high and low for a more permanent solution instead of sticking any excess on the credit card.”
Tips for dealing with your credit card debt
Ms Tindall said there are a few ways Australians can deal with credit card debt – some are areas TND has covered previously, so click the links for additional expert advice.
