More and more Aussies are cutting up their credit cards for good, but they aren't giving up on spending.

In the lead up to Christmas in 2018, figures from bank regulator APRA and the Reserve Bank show that credit card lending tumbled to a 13 year low. And those figures are set to fall again, as the fallout from the Hayne Royal Commission into the banking sector continues to restrict lending.

Credit card debt has a long way to go

While Aussies are shunning credit cards, we still owe lenders plenty of money on them. The latest RBA figures show that there are more than 16 million active credit card accounts in our country with a combined 32 billion in debt.

When you consider that there are 16.6 million credit-active Australians and that not all of them have a credit card, that means the average Australian has more than one credit card and owe on average $2000 on each one.

Debit card transactions are on the rise

While credit card usage falls, the rise of debit cards continues.

These cards operate on the same principles as credit cards and can be used online and overseas, the key difference being that you are using your own savings rather than debt.

The APRA and RBA data shows a 14.7 per cent increase in the number of debit card purchases compared with 2017 which means that while Aussies are turning away from credit cards, they are still spending.

"The latest credit and debit card data show no signs that Aussie consumers are retreating to their burrows," CommSec chief economist Craig James said.

"Credit and debit card purchases in November were up 5.8 per cent over May. The previous year, growth was closer to 3.6 per cent."

So, the data is showing that more and more people are choosing the interest free debit card option to manage their money better and avoid the high interest rates credit cards attract.

How you can manage your credit card debt

Being trapped in the credit card debt spiral can be difficult to escape.

There are measures you can put in place, though. Here are some that can help:

  • Switch banks: By moving your credit card, many lenders will offer up to 2 years of 0 per cent interest with no balance transfer fee. This gives you a chance to cut that debt down.
  • Attack smaller debt first: Like the old saying goes, focus on the small things and the big things will take care of themselves. Start with your smallest debt and work your way up and your debt eradication will snowball.
  • Use management tools: We are not all accountants, nor can we all afford the services of a bookkeeper to get us back in the black.

There are many tools available like the InfoChoice Credit Card Repayment Calculator, which will help you adjust your repayments and get on top of your debt faster.

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.