The Australian credit card market's statistics reveal some interesting changes over the last couple of years. Like most, it was heavily impacted by the pandemic, with less spending at points and, on top, a significant number of people paying down their credit card debt across the country.
This debt reduction was likely due partly to the Federal Government’s stimulus packages, as well as consumer concerns about the future of the economy and job security.
The Australian credit card market has also been affected by the buzz around competing services such as the ever-more popular “Buy Now, Pay Later” offers. All of this has contributed to a reduction in the size of the credit card market. Since 2021, though, it has shown signs of re-emerging.
Covered below are statitics on the Australian credit card market as of February 2023, inclusive of market size, trends, credit balance types, and comparisons with other payment methods.
Size trends of the Australian credit card market
In February 2023, the size of the total credit card market in Australia sat at $33.8 billion, with 12.5 million credit card accounts in total.
Australia's total dollar value of credit card balances jumped by 2% in February as the market continues to progressively re-expand.
The country's total credit card balance is up by 5% compared to February last year, driven mainly by an increase in non-accruing interest credit card balances.
Non-accruing vs. accruing interest credit card debt
Credit card balances accruing interest that saw major declines since Covid are now starting to gradually increase back up again since October 2022. They now make up 53% of the total credit card balance, which is still a historical low as Aussies still maintain low levels of interest-bearing credit debt.
Since April 2020 and up to February 2023, $7.7 billion (30%) in credit card interest-accruing debt has been paid off. This balance reduction saves credit card holders a lot of extra interest charges.
However, the trend is beginning to reverse, since October 2022, the continuous paying down of credit card debt accruing interest has shifted to balances slightly re-expanding as credit card usage re-emerges.
On the other hand, credit card balances that don’t accrue interest remain on a slight uptrend. This is the primary driver in the regrowth of the market. At the beginning of 2020, non-interest balances accounted for 36% of the market. As of February 2023, though, they made up for almost half of it, at 47.5%.
Tip: If you pay your full credit card statement balance each month and want to earn reward points then check out offers on rewards credit cards or frequent flyer credit cards. Or, if you find you end up paying interest each month on your credit card debt, check out these tips for paying off credit card debt fast.
Domestic & overseas credit card spending
Both domestic and overseas spending on credit cards have been on the uptrend for 2022/23 compared to the prior year. Purchases within Australia, for instance, sat at $22.6 billion in February 2023. This number is 9.9% greater than the same month in 2022.
As more people become capable of travelling and felt more comfortable doing so after the removal of travel restrictions, it’s no surprise that overseas purchases compared to last year are up. In fact, they were almost two times more in February 2023, coming in at $1.28 billion.
Tip: If you’re considering interstate or overseas travel and have complimentary travel insurance on your credit card, it’s worth contacting your credit card provider to see what COVID insurance coverage they may provide. Some issuers now offer medical and travel interruption protection against the health issue.
The average monthly spend on Austrlian credit cards continues on uptrend and now sits at $1,942. The average debt (balance owing) on a credit card is $2,707.
Credit card useage and credit limits
Australia's average credit card limit is currently $9,238, which has been steady for the most part in 2022/23. Typically, about 29% of customers’ credit limits get used, leaving them with 71% available credit to spend.
Consumer spending by credit cards & debit cards market share
In Australia, the most used payment method for consumer purchases is, by far, via credit card. Yet, we’ve seen spending habits making a shift to more use of debit cards, too.
March 2022 saw the highest point of debit card usage. During this month, these cards accounted for 33.18% of the total combined purchases made on debit and credit cards in Australia.
In February 2023, debit cards made up a little less, at 22% ($6.6 billion), while credit card spending was $23.8 billion, or 78%.
Spending on both credit and debit card types has been on the uptrend generally in recent times, much of which can be attributed to the surge in inflation since 2020. However, significant growth has occurred in the use of credit cards.
As stated by the Reserve Bank of Australia (RBA), the annual change in prices (CPI) experienced by Australians has been a 6.8% increase from February 2022 to February 2023. During this same period, credit card purchases increased by 13%, while debit cards dropped by 30%.
As you can see, there has been quite a bit of movement in Australia’s credit card market in recent times. If you’re keen to apply for a new card or want to switch to a product with better terms or offers, we can help you find and compare the best credit cards in the country.
Whether you want a frequent flyer product, a low-interest card, a balance transfer or no-fee option, or a rewards card, we can help you narrow your choices today.
Check out other similar articles:
What Is A Visa Credit Card, Exaclty?
Research Shows Almost 60% of Credit Cardholders Pay Little Attention to Interest Rates
Best Balance Transfer Credit Cards in Australia
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