One in five Australians (20 per cent) earning between $101,000 and $150,000 per annum now own three or more credit cards and hold an average of $5,978 in credit card debt, according to a finder.com.au survey of 2,085 Australians.
The survey revealed that the average credit card debt is $4,268, with the level of debt accrued generally rising with income.
However, the data found that respondents with no income also hold a similar level of debt — $3,774 in credit card debt on average.
According to Finder, this group therefore owes more than those earning between $50,000 and $75,000 ($3,459), with 17 per cent also stating that they have more than one credit card.
Australians earning up to $25,000 owed an average of $3,802, with nearly a fifth (18 per cent) having multiple cards.
Additionally, respondents earning between $26,000 and $50,000 owe $3,761 of debt, while a quarter have more than one credit card.
Further, according to Finder’s State of the Credit Card Market report 2018, Australians made more purchases using their credit cards in 2017, up from 2.5 billion in 2016 to 2.7 billion.
In 2017, Australians spent an average of $1,573 per month using credit cards, with an average purchase of $117.
However, Finder noted that “Australians are getting better at paying off their debt”, with the average balance accruing interest coming in at $1,903 in 2017, down from $2,471 in 2016.
Credit card users paid approximately $174 in interest in 2017, on an average interest rate of 16.97 per cent.
The report also found that Australians paid off more credit card debt than ever before, with repayments totalling $341 billion in 2017 ($174 per month).
On the whole, there are just under $16.7 million credit cards in Australia, with an additional 8,298 Australians issued with credit cards in 2017.
The figures come off the back of Treasurer Scott Morrison suggesting that Australian borrowers are becoming better equipped to cope with such stresses as a result of low interest rates in the past few years.
He said: “[O]ne of the things that has happened over the last three or four years is when interest rates fell, most householders kept paying their mortgage at around about the same rate.
“So, they built up a buffer and that average buffer now is about two years on average and two and a half years for owner-occupiers, so they’ve got ahead of their mortgage payments and that’s been very sound that those Australians have done that.
“[Because] of the way our mortgage market works in Australia, we have built in that buffer which gives us a bit more resilience in [times of financial stress].”
The Treasurer said that he also believes that prospective borrowers are better placed to manage stresses due to tightened lending standards.
Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.