Credit card debt at historic lows

Credit card balances in Australia dropped to $49.11 billion for October, the fourth monthly drop in the longest sustained decline since records started in 1985. Mastercard spokesman David Masters said cautious consumers may have been holding off on spending in the leadup to Christmas to salt extra away for the holiday season.

“Outstandings on cards now represents just 3.63 per cent of total household debt their lowest point for over 11 years. For credit card balances accruing interest, that number is even lower at 2.69 per cent – an historical low.”

Cyber crime expert Mason Hooper from RSA Security said the drop in credit card use could be put down to the rising use of debit cards, particularly for online shopping.

“I do think the drop in credit card use has a lot do with the fact that since the GFC people are more worried about debt and are turning to debit cards to use online,” Mr Hooper said.

Younger Australians are also thought to be leading the march to cash-based transactions. Debit card usage was most popular for those aged 18-34 (40%), according to a recent survey by ING Direct. Younger Australians were were also high users of EFTPOS (36%) and PayPal (34%).

Source: Herald Sun