The Australian credit card market has almost reached saturation. What do we do now?

Information verified correct on October 24th, 2016

The number of credit cards in Australia has topped 16 billion, while the limits on those cards rose by 60% over the past 10 years. Are Australians out of their depth when it comes to their plastic?

If you’re an Australian adult without a credit card, congratulations – you are part of the extreme minority among us. You are part of the 10% of the adult population that do not carry around this piece of plastic in their back pocket. To put that into perspective, 10 years ago you would have been one of the 21% of people without a credit card.

Not only are more people using credit cards than ever before, our analysis of Reserve Bank data shows we’re Australians are lugging around more debt on these cards – $18 billion more than a decade ago.

It seems the price of everything has increased.

Therefore, isn’t an increase in credit cards and their use also warranted?


Well, yes and no. The reality is that credit cards are an excellent tool for managing everyday spending – provided you use them correctly – so an increase in their use may well be a good thing. Conversely, for those of us who can’t quite manage our spending, an increasing in credit use could ring alarm bells. So, which stance should we take?

In this instance, the Consumer-Price Index (or CPI) is a good metric to weight the growth of credit cards against, as it’s a baseline for the growth in cost of a lot of our everyday expenses.

But the numbers don’t fully stack up

The thing is, the numbers don’t fully line up in terms of growth – in fact in the past 10 years:

  • Credit card limits grew by 61 percent
  • The total balances on credit cards grew by 52 percent
  • The total balances accruing interest grew by 34 percent
  • The number of credit card accounts grew by 31 percent
  • The CPI went up by just 25 percent
  • The adult population of Australia grew by a comparatively measly 20 percent

So what should we make of these numbers? Are we doomed to debt?

Does this mean that we should batten down the hatches on our tap-and-go groceries, or cut up our cardless cafe luxuries? No, it just means that credit cards, for all their conveniences and uses, are becoming a more widely used payment method. As technology and security increases around our digital expenditure, so too does its use. The trick is to choose a credit card type that works for your situation, find the lowest rates and best features that complement your spending and simply use your plastic with the same gravity and planning as you would your own money.

When you start living beyond your means, statistics like this become an issue. If you find that you have bitten off more than you can chew it’s time to pick yourself up, identify your spending flaws, consolidate that nasty debt and begin the slow but dependable path of financial restoration.

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Credit Cards Comparison

Rates last updated October 24th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on purchases and balance transfers for 15 months. This card also comes with a low annual fee.
0% p.a. for 15 months (reverts to 13.99% p.a.) 0% p.a. for 15 months with a one off 3% balance transfer fee $59 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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