Credit card debt continues to fall 08 September 2020 6:36AM mce-anchor
John KavanaghConsumers and businesses wiped another significant chunk off their credit card debt in July, continuing a trend that has been one of the features of the financial impact of COVID-19.
According to the latest Reserve Bank payments data, balances accruing interest on personal credit and charge cards fell 5.7 per cent from A$22.7 billion in June to $21.4 per cent in July.
Balances accruing interest have fallen more than 20 per cent since January and are now at their lowest level since 2005.
The average balance accruing interest on a personal credit card account in July was $1633, compared with $1981 in July last year.
In the commercial credit and charge card market, balances accruing interest fell 7.9 per cent from $1.05 billion in June to $971 million in July.
Balances accruing interest on commercial cards have fallen around 24 per cent per cent since January and a now at their lowest since 2009.
Total balances for personal and consumer credit and charge cards are also well down.
The volume of transactions on personal cards has picked up over the past few months, as has the value of transactions, but this has been more than offset by repayments.
The number of personal credit and charge card accounts was 13.1 million in July – the lowest number since 2008. The number of commercial accounts was 816,000 – also the lowest since 2008.
Meanwhile, use of debit card accounts continues to grow. The number of purchases using debit increased by 7.3 per cent to 714.9 million, compared with the previous month, and the value increased by 10.4 per cent to $35.2 billion.
Since the start of the year, the value of debit card purchases has grown by 22 per cent.
