Purchases made with debit cards jumped by an annual rate of 15.2% in November, the strongest growth in four-and-a-half years, according to CommSec.1
The average credit card balance rose by $65.90 over the month to $3,127.70, the largest monthly increase in 12 months. However, the 12-month average balance fell by 0.7%.
This follows data in October that showed the average credit card balance was at a decades-low $3,061.90.
“While the collective debt pile is large, Aussies are still cautiously spending, preferring to live within their means,” CommSec Senior Economist Ryan Felsman said in a note.
Young Aussies embrace debit cards
Debit cards are becoming the preferred way to pay for younger Aussies, too, according to Felsman.
“Generation Y is driving a change in card preferences, with debit cards preferred over credit cards due to continued wariness of debt and reluctance to carry cash,” he said.
“Some consumers use debit cards to avoid debt and incurring higher interest charges, even though they offer rewards.”
Splashing out on spending
A sharp pick-up in retail spending during November saw Aussies open their wallets and purses.
“Consumers splashed out on the new Apple iPhone X, clothing and other household goods at the Click Frenzy, Black Friday and Cyber Monday sales,” Felsman explained.
The latest data shows Australians owe a combined total of $52.2bn on their plastic.
If the unexpected happens and you find yourself falling behind in paying what you owe, you can contact CommBank for guidance and support.
1. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.