There are grim indicators that Australians are having to show to their bank cards to fight the rising value of residing.
Credit card debt is now on the rise, in line with information launched by the Reserve Bank as we speak, with thousands and thousands added to the books for a lot of Australians.
The whole bank card invoice for households elevated by $86.6 million to hit $16.89 billion in October, figures present.
That comes after the worth of bank card transactions fell from July to September, a worrying signal that the rising value of residing might have begun to chunk Australian within the pocket, in line with RateCity.com.au analysis director Sally Tindall.
“Some households are struggling to clear their credit cards in the face of cost of living and mortgage repayment pressures,” she mentioned.
“After three months of chipping away at credit card bills, the total debt is back up, albeit slightly, to $16.89 billion this month. With the average credit card rate at 17.53 per cent, that’s a huge amount to paying interest on,” she mentioned.
Debit card transactions have grown by 2.5 per cent or $1.13 billion, to succeed in $46.29 billion in October.
Combined, Australians spent a complete of $72.44 billion on their credit score and debit playing cards. This was the second highest stage on report behind the August figures, in unique phrases.
“Spending remained strong across both credit and debit cards in October, clocking in at the second highest level on record, despite the RBA hikes. These figures are unlikely to ease in the next round of data after Australians opened up their wallets to take advantage of the November sales,” Ms Tindall mentioned.
The timing of the price of residing disaster with Christmas implies that Australians are unable to go for slicing again on spending in line with Ms Tindall.
“We expect households will start to make cutbacks in their spending, but potentially not until next year, as families start to feel the full impact of the rate hikes, which typically take two- to three-months to hit people’s bank accounts,” she mentioned.
Ms Tindall urged Australians to rethink reaching for his or her bank card, regardless of the temptation that the vacation season brings.
“Put the credit card in the bottom draw this Christmas, so you’re not tempted to spend money you can’t afford to repay,” she mentioned.
