Total credit card debt has grown by more than four per cent, new data from the Australian Bureau of Statistics has revealed.
Despite the slowdown in the number of new credit card accounts being opened, ABS data showed total debt grew 4.11 per cent in the 12 months to May 2011.
But RateCity’s chief executive Damian Smith said what’s more concerning than the total debt, is the bigger jump in the amount of credit card debt accruing interest.
“We’ve found that credit card balances costing card holders interest increased by almost six per cent in May 2011, compared to May 2010 – that’s almost $2 billion more than in May 2010,” he said.
“In May 2011, credit card balances racking up interest were $36.8 billion, which makes up about three-quarters (74.52 percent) of the total credit card debt of $49.4 billion.
“What this means is card holders are not only being charged higher interest rates than last year but they are also paying more in interest from bigger debts.”
With higher costs of living starting to place greater pressure on households, Mr Smith said credit card holders should use the next few months to get back on track with their debts.