Australians are racking up higher credit card bills as the cost of living rises, with the latest RBA data showing four consecutive months of mounting debt.
Despite an economy-wide paydown of credit card debt during the COVID shutdowns last year, Australians have since started swiping and tapping their cards in greater numbers, increasing their unpaid bills.
Gas, electricity, food and rent prices are rising, and soon mortgage bills will join the mix, putting even more pressure on families.
Accrued interest on debt rose 0.3% in February to $17.4 billion, the RBA said on Thursday, although it was still 11.4% lower year-on-year .
RateCity research director Sally Tindall said it was the fourth month in a row that credit card debt had increased, starting in December last year.
“While the increases have so far been relatively subdued, it’s a red flag some Aussies are playing hard to get,” she said.
“Australians have made huge strides in credit card debt over the past two years. It’s nerve-wracking to see some of that hard work unravel.
The higher debts come amid growing household fiscal pressures, with rising costs of living currently outpacing wage growth.
“You only have to go to the gas station or the supermarket to know that inflation is on the rise and that is putting pressure on some family budgets,” Ms Tindall said.
“Families struggling to squeeze the monthly budget up should look high and low for a more permanent solution instead of sticking any excess onto the credit card.”
Tips for managing your credit card debt
Ms Tindall said there are several ways Australians can deal with credit card debt – some are areas DT covered earlier, so click on the links for additional expert advice.