In the past year, Australians have wiped $7.8 billion in debt and taken the scissors to almost one million credit card accounts.
However, the rate at which Australians are paying off debt and closing cards has slowed in October.
Also, people gave their credit cards more of a workout in October, spending $473.8 million more month-on-month, in original terms.
RateCity.com.au research director, Sally Tindall, said it was great to see the total debt accruing interest drop below $20 billion.
“It’s taken us 16 years to get here, and let’s hope we can keep the debt accruing interest under $20 billion on the other side of Christmas,” she said.
“While Australians are still chipping away at their outstanding credit card debt, the rate at which we’re knocking it off has slowed.
“Next month the number of transactions is likely to spike as a result of pre-Christmas sales, such as Click Frenzy and Black Friday.
“The real test will be whether the debt accruing interest spikes too or whether Australians have learnt their lesson about the perils of racking up high-interest credit card debt.”
These findings are consistent with other ABS figures showing that Australians have chosen to save more and spend less since the pandemic, causing the household savings to income ratio to increase from 7.6 per cent to 22.1 per cent, easing slightly to 18.9 per cent in the September quarter.
