Credit cards have become a lifeline to help Aussies with the rising cost of living
- Due to the rising cost of living, 75% of credit card holders report using their plastic more, 43% of which are using them more for groceries, 37% for day-to-day expenses, 32% for petrol, and 21% for medical expenses
- One quarter (25%) have signed up for a new credit card due to the rising cost of living, and a third (33%) say they already have multiple cards in action
- The average credit card interest rate is 17.12%, and the average annual fee is $136
- The leading low-rate credit cards are G&C Mutual Bank Low-Rate Visa Credit Card, at 7.49% and Auswide Low Rate Visa, at 8.55%.
- The Mozo Expert Choice Awards crowned American Express as Credit Card Provider of the Year. Defence Bank, MOVE Bank, Coles & Bankwest were also recognised as having some of Australia’s best credit cards in 2022.
New research from financial comparison site Mozo.com.au has found that a staggering 75% of Aussie credit card users are leaning on their plastic to cope with the rising cost of living.
The finding comes as the latest RBA data shows that credit card spending is booming, with the value of transactions increasing year on year at the fastest rate (27%) in over 15 years, up from $19.8 billion in August 2021 to $25.2 billion in August 2022. While in August 2019 it sat at $22.7 billion.
“Life events are back in full swing, which is a big adjustment after having fewer expenses in previous years. But inflation and rising interest rates are the icing on top of a very expensive cake, causing more people to rely on their credit card to get through these expensive times,” said Clarie Frawley, Personal Finance Expert at Mozo.
Mozo’s nationally representative survey revealed that 43% used their credit cards more to afford groceries, and 37%) for day-to-day expenses. Petrol (32%) and medical expenses (21%) were also costing that Aussies felt they had been increasingly leaning on their credit cards for.
“With politicians and economists saying that inflation is only going to get worse before it gets better, these are very worrying statistics and should be a wake-up call for Aussies to make changes where possible to their spending habits and ensure they are on the best credit card deals possible.”
In addition to increased card spending, due to the rising cost of living a quarter (25%) of credit card customers said they have signed up for a new credit card and a third (33%) said they already have multiple cards in action.
According to Mozo’s database, the average credit card interest rate is 17.12% and the average annual fee is $136. In comparison, the average rewards credit card interest rate is 20.12%, with an average annual fee of $216.
It also shows that the leading low-rate credit cards (excluding cards with 0% intro rate terms and the ‘no interest’ cards with a monthly fee) are G&C Mutual Bank Low-Rate Visa, Credit Card, at 7.49% and Auswide Low Rate Visa, at 8.55%.
“Now is a great time to take stock and rethink your card choices to make sure that you are not throwing money down the drain paying high fees or interest rates, or for card features, you are not utilising,” said Frawley.
“And if you are struggling to stay on top of your repayments, get in touch with your card provider as soon as possible so that you can put measures in place to help manage debt.”
To determine which cards offer great value and market-leading features, Mozo’s experts compared 221 personal credit card products for the 2022 Mozo Experts Choice Awards. Some of the winners of this year’s awards are:
- American Express was crowned Credit Card Provider of the Year
- Move Bank & Defence Bank were both recognised with a Best Low-Rate Credit Card Award
- Coles took out a top place in the Best Rewards Credit Card Award category
- Bankwest was a multi-award winner, receiving honours in the Low-Rate Platinum Credit Card, No Annual Fee Credit Card, Balance Transfer Credit Card Award categories and more.
