Australians seem to be ditching plastic money at a record rate. Latest data from the RBA shows the number of active credit cards in Australia has dropped to 13.9 million – the lowest it’s ever been since April 2011.
More than half a million personal credit card accounts dropped off from August to September this year – which is the biggest monthly drop on record. Compared with one year ago, the numbers have fallen by 6.4%, which basically means there are 942,810 fewer personal credit card accounts now than there were in September 2018.
Take a look at the credit card data for a deeper insight into the trend:
|Sep-19||Change from previous month||Change from Sept 2018||Comments|
|No. of personal credit card accounts||13,906,927||-594,289
|Lowest since April 2011|
|Total balances accruing interest||$27.73 B||-1.50%||-7.40%||Lowest since December 2006|
|Balance accruing interest per account||$1,994||2.69%||-1.07%||Highest since June 2019|
|Total credit card limits||$133.43 B||-0.97%||-4.30%||Lowest since December 2014|
Notes: Excludes commercial cards, using original data from the RBA. Data released 12 November 2019. Some people have more than one card | Source: RateCity.com.au
After hitting their peak of 15.45 million two years ago in June 2017, the credit card numbers have been seeing a steady decrease. There are a number of reasons that can be attributed to this decline:
1. A general change in consumer attitude towards credit cards
2. The rise of buy-now-pay-later services
3. Tighter credit card regulations
“There are a number of factors at play here. Some customers are cutting up their credit cards in order to get their home loan application across the line, others are getting their credit card applications rejected as a result of the government’s tougher credit card regulations.
But the biggest factor is likely to be the rise and rise of buy-now-pay-later services, which are showing no sign of slowing down,” says Sally Tindall, research director at RateCity.com.au.
However, if you are in the market for a shiny new credit card, it would be a good time to take advantage of credit card companies trying to lure back customers with attractive offers like low interest rates, cashback options, rewards points and no annual fees.
And if you’re keen to kick off your debt and get control of your finances in the new year, sign up for our online Money Mokeover course hosted by David and Libby Koch.