Analysis of data from the Reserve Bank of Australia (RBA) by finder.com.au has estimated that Australians have an average credit card debt bill of $1,727.
According to finder.com.au, interest repayments on credit card alone are expected to total $230 million, even after taking into account the 55-day interest-free period.
The analysis found that 81 per cent of credit card holders hope to pay off their debt within three months. However, 1 in 20 Australians said that they will be paying off their debt over the next 12 months, while a further 19 per cent of credit card holders believe they need more than three months to pay off their debt.
Insights manager at finder.com.au Graham Cooke believes that Australians are “over-reliant” on credit cards when doing their Christmas shopping.
“If the Christmas spirit is measured by consumer spending, we were all feeling very festive,” Mr Cooke said.
“Aussies spend more on credit cards in December than in any month.
“This over-reliance on credit cards in December means the cost of Christmas is carried well into the new year and could take a toll on household budgets throughout 2018.”
Mr Cooke also encouraged more Australians to consider balance transfer cards to reduce interest repayments.
“A balance transfer could give credit card holders the chance to make more headway on their outstanding balance, especially if they’re having difficulty making repayments,” the insights manager added.
According to finder.com.au, despite continued growth in the use of credit cards, the average balance accruing interest per card has dropped from $2,470 in 2012 to $1,890 in 2017.
[Related: ASIC provides tips for financial resolutions]