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Expert Report of Australia's Shifting Credit Card Market: Insights and Implications


The recent findings from CreditCardCompare.com.au's 2024 study on credit card debt in Australia offer both optimistic and cautionary insights into the financial habits of consumers nationwide.

As reported by the Reserve Bank of Australia, the total credit card debt in Australia stands at $40.99 billion—a notable decline from the peak of over $52 billion in 2018. This reduction is significant, indicating a shift in consumer behavior towards more sustainable financial practices.

Key Credit Card Stats

  • Total credit card debt in Australia: $40.99 billion
  • Total number of credit card accounts: 13.47 million
  • Average balance per credit card account: $3,043
  • Average monthly credit card repayment: $2,650
  • Average credit card balance being charged interest: $1,374
  • Average value of a credit card transaction: $115
  • Average number of monthly credit card transactions per account: 22.7
  • Average credit card interest rate: 18.05%
  • Average annual credit card fee: $135

Credit Card Debt Management

One of the more encouraging aspects of the study is that less than half of the current credit card debt accrues interest. This implies that a majority of Australians are managing to clear their dues within the card's interest-free period, a commendable practice that suggests prudent financial management among cardholders. However, the $18.5 billion that does accumulate interest represents a substantial burden and highlights the ongoing challenges many face in managing credit debt effectively.

Market Dynamics

The market dominance of Visa and Mastercard, processing 93% of transactions, remains unchallenged, with American Express and Diners Club capturing a smaller, albeit higher-value, segment of the market. The decline in the number of credit card accounts by approximately 20% since 2018, largely due to increased mortgage borrowing, points to a cautious approach by consumers in managing their credit availability amidst larger financial commitments.

Usage Trends and Consumer Behavior

The surge in credit card usage, with monthly spending reaching nearly $35 billion—a 20% increase from pre-pandemic levels—suggests a rebound in consumer confidence and a return to more robust spending habits. The doubling in the number of transactions per card over the last decade signifies a shift towards using credit cards for smaller, everyday purchases. This trend, while reflecting convenience and possibly rewards accumulation strategies, also requires vigilant debt management to avoid the pitfalls of high interest and fees.

Managing Debt Wisely

The high average annual interest rate of 18.05% on credit cards underscores the importance of debt management strategies. David Boyd's recommendation to consider debt refinancing options like balance transfer cards offers a lifeline to those struggling. These tools can provide crucial breathing space for managing debt, but they also require a disciplined approach to payment schedules to avoid falling back into debt.

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