Credit card debt falls but splurge is coming

LOCKDOWNS in half the country have continued to scale back credit card debt, which is now at its lowest level since January 2004.

The nation had $18.3bn in plastic card debt accruing interest at the end of August, down $581.6m or 3 per cent, according to Reserve Bank figures released on Thursday.

While the lower debt was welcome, and reflected hard lockdowns in NSW and Victoria which constrained spending options, Canstar warned that the debt load could bounce back again. Canstar said it had conducted a survey which revealed that 68 per cent of Australians were planning a major purchase once vaccination rates of 70 per cent and 80 per cent were achieved.

Asked about the first major purchase they intended to make once restrictions were lifted, the top three responses were a holiday (30 per cent), a new car (7 per cent) and home renovations (5 per cent).

Canstar executive Steve Mickenbecker said lockdowns had presented an unexpected opportunity for people with resilient incomes to get their balance sheets back into shape.