Credit card debt paydown stalls
The big push by Australian consumers to reduce their credit card balances may have come to a halt.According to the latest Reserve Bank credit and charge card statistics, the average balance accruing interest per card account was A$2000 in May, compared with $1983 in April and $1990 in March. In May last year the average balance accruing interest was $2011 per account, indicating that there has not been much change in credit card debt over the past year.This contrasts with previous years, when consumers paid off significant amounts of their card debt. Back in May 2012 the average balance accruing interest was $2453, a year later it fell to $2355 and then to $2155 in May 2014.Consumer surveys indicate that people still place a high priority on reducing debt. Maybe they have reached a level of comfort with balances around their current levels; maybe low wage growth is forcing them to rely more on credit.Consumers made purchases worth $26 billion on credit and charge cards in May, compared with $23.4 billion in April. Average spend per card account was $1577, compared with $1425 in April.MWE Consulting pointed out that cash advances of $10.3 billion over the 12 months to May were at their highest level since 2011.