Finder Credit Card Report 2024

Finder's Credit Card Report combines aggregate credit card data from the Reserve Bank of Australia (RBA) with Finder's Consumer Sentiment Tracker (CST) to better understand the challenges influencing Australian cardholder behaviour and attitudes.

The resurgence

The Australian credit card market is undergoing a revival. After a significant downturn between May 2017 and April 2022 – during which 3.6 million cards were removed from circulation – cost of living pressures have compelled Australians to reconsider their financial strategies.

Following 31 months of a below -1% cash rate, the RBA lifted its target 12 times between May 2022 and June 2023, increasing pressure on household budgets. Around the same time, the number of credit card accounts in Australia started to increase.

Since April 2022 Australians have opened over 356,000 new credit card accounts. In January 2024, Australia's credit card spending hit an all-time high of $35.3b. These changes correlate directly with the increasing cash rate and indicate that credit cards are becoming a vital component of financial management for many Australians trying to cope with rising living costs. From everyday groceries to mortgage repayments, they offer a flexible means to navigate tough financial periods.

This report will examine the factors driving the surge, the impact changing consumer behaviour is having on the credit card industry, and the future of the credit card market.

Why are Australians picking up plastic?

• The proportion of Australians reporting extreme stress regarding their financial circumstances reached a peak of 31% in July 2023, up from 18% 2 years prior.
• At the same time, dependence on credit cards has risen. In May 2021, only 18% of individuals felt they couldn't manage their finances without a credit card. By June 2023 this had jumped to 30%.
• Inflationary pressures have pushed spending 11% above where it would have been if the trends evident for the preceding 3 years had continued.

Our expert says

"Credit cards are a notably costly form of borrowing and the shift towards reliance on them, spurred by the cost of living crisis, raises concerns."

Graham Cooke

Head of consumer research

Savings buffers save us, for now

• Australians are managing their debts remarkably well. A record 88% of September's balance was paid off in November 2023.
• These record-low balances have pushed credit card bill stress down from 22% in January 2021 to 11% currently.
• This is due to the significant savings buffers built up between 2020 and 2022. Australians were saving $925 a month in March 2021, well above the usual monthly savings of around $650.

While Australians are using credit cards for more purchases than ever, they are also improving at managing their balances, with the total national balance accruing interest at a historic low.

Graham Cooke
Money expert

Which consumers are struggling?

• The average mortgage holder can live off their savings for more than 3 months. This has stayed steady over the last 2 years. Meanwhile, renters have seen their buffers drop by 17% to just above 2 months.
• Because of this, a diversion in credit card behaviour between mortgage holders and renters is evident. A record 39% of renters with a credit card rely on it compared to only 29% of mortgage holders with a card.
• 24% of renters have missed a repayment by 30 days or more, in stark contrast to just 13% of mortgage holders.

It seems as though relief may have come at just the right time for these consumers. The first interest rate cuts are expected as early as August with no further rises in sight. However, if the winds change, these cardholders cannot absorb much more financial stress.

Graham Cooke
Money expert

Risk vs reward

• Nearly half of credit cardholders (46%) who collect rewards points struggled to satisfy minimum spend requirements.
• Almost 2 in 3 (65%) of those who struggled to satisfy the bonus point requirements said they spent more than usual or went into debt to reach the requirements.
• Recent data shows that more than one in two Australians with a credit card (52%) regret a purchase they've made on their card.

Credit through the generations

• 54% of baby boomers believe Buy Now Pay Later (BNPL) is risky compared to 35% of gen X and Y, and 27% of gen Z.
• It is understandable, then, that gen Z and Y are more comfortable with BNPL when 20% and 15% of them respectively used BNPL as their first line of credit. This is compared to only 7% of gen X and 2% of baby boomers.
• 14% of Australians don't know the risk of BNPL compared to 9% who do not understand the risks associated with credit cards.

As credit cards already have requirements around disclosing rates, fees and other crucial details, the same requirement for BNPL should help consumers make informed decisions around what type of product they choose for payments.

Graham Cooke
Money expert

Expert commentary

Amy Bradney-George – credit card expert

"Credit cards are a part of the financial landscape in Australia, and the research in this report shows that's not going to change anytime soon. What is changing, for the better, is that more people are managing their credit cards well. The amount of debt accruing interest on credit cards dropped significantly during the pandemic and has stayed below pre-2020 levels.

One outcome of more responsible credit card management is that more people are considering the potential value of rewards and other perks. Younger generations, too, are more open to credit cards now that the shine of BNPL has worn off – influenced by media reports of serious debt and the government's plans to officially regulate it as a credit product.

But there is still a dark side to credit cards. As the cost of living crisis has continued, some people have turned to credit as a way to make costs meet, particularly for essentials, which could lead to more financial stress in the long run."

Written by

Joshua Godfrey

Insights analyst

Joshua Godfrey is an insights analyst for Finder. Josh manages Finder's monthly Consumer Sentiment Tracker and quarterly reports which examine the financial issues currently affecting Australians. He has a Bachelor of Business and Diploma in Innovation from the University of Technology, Sydney where he studied finance and marketing. See full bio

Joshua's expertise

Joshua has written 25 Finder guides across topics including:

• Data and analytics
• Money trends