Credit card spending hits new record
New figures released yesterday indicated that credit card spending hit a record of $9 billion in May this year, an increase of 21 per cent on the same time last year, despite the Reserve Bank increasing interest rates in May to slow the economy.
Over 1 billion credit card transactions are now made every year in Australia on credit and debit cards – 50 per cent of all non-cash payments. In 1996, credit card transactions comprised 56 per cent of card transactions, rising to 60 per cent by mid-1999. On yesterday's figures this level is probably now at 70 per cent.
The Reserve Bank is reportedly concerned that credit card usage is more common than EFTPOS because of the way that fees are levied. For this reason, the RBA has opted to reform both the payments systems at the same time, rather than just focusing on credit cards first. The RBA's favoured option is to remove interchange fees altogether from EFTPOS transactions. The banking industry is believed to be in favour of enacting reforms to both the credit card and EFTPOS systems together.
View Tips and Tricks on credit cards, or view our article on how to use your credit card wisely.