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The amount of Australians’ personal credit card debt approached closer to $ 20 billion last year, despite massive attempts to pay off the debt.

Data released by the Reserve Bank of Australia showed that in November, interest-bearing balances on personal credit cards increased by $ 241.7 million to $ 19.96 billion.

That’s despite $ 7.44 billion in personal credit card debt being paid off over the course of the past 12 months during the height of the COVID-19 pandemic.

Credit card
Australians have paid off more than $ 7 billion in credit card debt during the course of the pandemic. (Getty)

Canstar finance expert Steve Mickenbecker said that despite the increase, many Australians have taken on their credit card debt.

“2020, plagued by COVID-19, has been a tightening period of family finances for many Australians, with $ 7.44 billion cut off in personal credit card debt,” Mickenbecker said.

“Opportunities to spend have shrunk as a result of closed closings and a portion of the $ 36 billion early retirement release has found its way into credit cards, extinguishing stubborn debt.”

Towards the end of the year, many Australians use credit cards for Christmas shopping. (Getty)

He theorized that it was not unexpected for Australians to use credit cards more before the Christmas season.

“The modest increase in debt in November should come as no surprise as it leads us into Christmas and comes off an extraordinary Black Friday and Cyber ​​Monday. We may expect a larger increase,” Mickenbecker said.

“The big picture remains one of moderation, hopefully a continuing trend.

“November Reserve Bank data may give banks a glimmer of hope that the credit card business is making a comeback, but no one wants to go back to the days when stubborn debt and impulsive spending inflicted damage on long-term to customers. “

While traditional Black Friday operations didn’t take place, online sales soared.

Sally Tindall, research director at RateCity.com.au, said the spending showed renewed consumer confidence.

“Australians went shopping before Christmas in November, fueled by Click Frenzy, Black Friday and Cyber ​​Monday sales,” said Ms Tindall.

“With the economy rebounding from a recession and all states out of the lockdown, Australians felt comfortable enough to spend some cash.

“While this increase in spending is great for retailers, credit card holders should not become complacent as the debt accumulates interest soaring for the first time in nearly two years.”

The information provided on this website is of a general nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website, you should consider the suitability of the information taking into account your objectives, financial situation and needs.


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