In a reflection of the ongoing financial strain on households, Australians spent a record $27.43 billion on personal credit card purchases in August 2024, according to the latest data from the Reserve Bank of Australia (RBA).
This represents an increase of $814.3 million (3.1%) compared to the previous month and a staggering $1.23 billion (4.7%) more than in August 2023.
Total credit card purchases in August 2024 – personal cards
| Amount | Monthly change | Year-on-year change | |
| Value of credit card transactions | $27.43 billion
Record high |
+$814.3 million | +$1.23 billion |
| +3.1% | +4.7% | ||
| Number of credit card purchases | 296.1 million | +10.1 million | +11.3 million |
| +3.5% | +4.0% |
Source: RBA, released 8 October 2024, seasonally adjusted data, excludes commercial cards. Monthly change is July 2024 to August 2024, year-on-year change is August 2023 to August 2024.
Credit cards filling the gap amid financial pressure
As inflation remains a pressing issue, many Australians are turning to credit cards to make ends meet.
With cost-of-living pressures still biting, the number of credit card purchases surged by 3.5% month-on-month, reaching 296.1 million transactions in August.
This suggests that while wages have struggled to keep pace with rising prices, credit cards are being increasingly used as a financial lifeline.
Laine Gordon, RateCity’s money editor, noted:
“Australians are reaching for their credit cards at record levels.
While inflation is starting to ease and interest rate cuts are on the horizon for next year, many families are struggling financially right now and using credit cards as a stop-gap solution.”
Debt is on the decline, but risks remain
In a positive sign, the total amount of debt accruing interest dropped to $17.55 billion in August—a decrease of $244.6 million (1.4%) from the previous month.
RBA: credit card debt attracting interest charges – excludes commercial cards
| Amount | Monthly change | Year-on-year change | |
| Debt attracting interest charges
(personal credit cards) |
$17.55 billion | -$244.6 million -1.4% |
n/a |
| Number of personal credit card accounts | 11.6 million | -60,083 -0.5% |
n/a |
Source: RBA, released 8 October 2024, original data, excludes commercial cards.
Additionally, Australians closed over 60,000 personal credit card accounts in August, signalling some effort to regain control over household finances.
However, despite these improvements, the $17.55 billion in debt that is still accruing interest remains a concern.
Gordon said:
“While it’s encouraging to see the total balance attracting interest drop, it’s clear that many Australians are still carrying a heavy debt load.
For those turning to credit cards, it’s crucial to make a plan to pay off the debt within the interest-free period.
Otherwise, the situation can quickly spiral into an even deeper financial struggle.”
Looking ahead
With inflation gradually cooling and talk of potential rate cuts next year, there is some light at the end of the tunnel for Australians facing financial challenges.
However, it’s clear that credit cards are playing a critical role in bridging the gap for many families in the meantime.
Now more than ever, it’s essential for those relying on credit to be mindful of the potential long-term costs and take proactive steps to manage their debt effectively.
