Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Borrow

Paying off debt like it’s 2006: Aussies clear $2.45bn deficit

By Grace Ormsby · January 14 2020
Reading:
egg

Borrow

Paying off debt like it’s 2006: Aussies clear $2.45bn deficit

By Grace Ormsby
January 14 2020
Reading:
egg
Credit card

Paying off debt like it’s 2006: Aussies clear $2.45bn deficit

author image
By Grace Ormsby · January 14 2020
Reading:
egg
Credit card

In 2019, Australians slashed credit card debt to its lowest level in almost 13 years, with balances accruing interest on personal credit cards plummeting more than $2.45 billion year-on-year.

Analysis of RBA data by RateCity showed that there is now just $27.2 billion in debt accruing interest, which it flagged was the lowest level since December 2006.

The number of personal credit card accounts has also dropped, with November 2019 figures showing Australians holding 13,857,155 accounts.

It’s almost 1 million less than the same time last year (-951,865) and is the lowest account number seen since January 2011.

It has coincided with a year-on-year 4.74 per cent decrease in Australia’s total credit card limits to $132.37 billion.

Advertisement
Advertisement

This is the lowest collective credit limit witnessed since October 2014.

RateCity chief executive Paul Marshall commented, “While personal credit card debt has been gradually falling for more than a decade, this past year saw balances take a significant dive.”

He said the $2.45 billion figure is “huge”, considering Australians cleared just $675 million in debt the year before.

“There are several reasons to explain the sharp drop. Some customers are clearing their card debts to help get their home loan approval over the line. Others are getting credit card applications knocked back, thanks to tougher regulations,” he outlined.

“[But] the biggest factor at play is likely to be the shift to buy now, pay later services, which are seeing exponential growth and no sign of slowing.”

While he did note that “credit card providers are responding with offers of rewards points and cashback, as well as low rate options”, the chief executive concluded that it was unlikely to be enough to win back the masses.

Paying off debt like it’s 2006: Aussies clear $2.45bn deficit
Credit card
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join the nestegg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Nest Egg.

Read more

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.