Australians are moving away from credit cards and personal loans – study
Total credit card debt and personal debt fell 13.2%, equivalent to about $ 20.8 billion, according to Equifax. Average individual debt fell 8.4%, or about $ 1,400. The data showed a steady decline in personal loans and overall credit card use, despite the financial challenges many faced during the pandemic, Equifax said.
While the average credit limit for newly opened credit card accounts has remained stable at $ 8,700, the number of Australians with multiple cards is steadily declining, with many appearing to want to rationalize their options by closing their additional cards. It also contributed to the decline in credit card use during the pandemic, Equifax said.
Mortgage borrowers were a key group who were less likely to have a credit card. Among those under 30, cardholders declined 24%, while cardholders declined 12% among those aged 30 to 40.
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“While we’ve been watching the shift from credit cards to buy-it-now services for some time, especially among younger consumers, the pandemic has accelerated the decline of the credit card for rainy days,” James said. . âIt is encouraging to see that Australians have taken positive steps to pay off their debts, avoid credit traps and improve their financial health. We expect this trend to continue.