Australians have reached the lowest level of national credit card debt for the first time in 17 years, new Reserve Bank of Australia data shows.
The national credit card debt accruing interest has fallen to its lowest level in almost two decades as Australians move to wipe debt in lockdown.
New RBA data showed the debt accruing interest on personal credit cards is down $1.11 billion from June to July 2021, to a total of just $18.90 billion – the lowest level since February 2004, in original terms.
This is the biggest monthly drop in debt accruing interest since last July when the country was coming out of a national lockdown, and government initiatives such as the early access to super program were operating, according RateCity research director, Sally Tindall.
“Australians have knocked down more than $1.1 billion in credit card debt in a single month. That’s a mammoth effort,” she said.
“Lockdowns are a kick in the guts, particularly for those who can’t work, but it has helped many households focus on clearing bad debt.”
“While the government hasn’t let people raid their super this time around, savings from lockdown living and tax returns may have helped some families find spare cash.
“At the beginning of COVID, Australians wiped nearly $7 billion off the total debt accruing interest in just six months. This time around, it looks like the lockdowns are having a similar effect. If this trend continues, we could see the national debt accruing interest drop below $18 billion in the next couple of months.
“While we’d all rather be out of lockdown and living freely, at least thousands of families can breathe a sigh of relief knowing their credit card debt no longer has a stranglehold on them.”