Credit Card Debt Is Falling, But High-Interest Balances Still Need Care

According to the latest RBA retail payments data, total balances accruing interest on credit and charge cards remained substantial in September, while Canstar reported that interest-bearing debt on personal credit cards fell to about $18.9 billion. Canstar’s analysis also showed a third consecutive monthly fall in personal card debt attracting interest, with balances down by about $550 million since 30 June 2026.

The decline matters because credit cards can be one of the most expensive forms of everyday borrowing when balances are not cleared in full. A smaller national balance may indicate that some households are using tax refunds, spending restraint or balance reduction strategies to regain control. It may also reflect consumers closing cards or reassessing rewards cards after recent payment-system changes.

However, the risk has not disappeared. A household can be part of an improving national trend and still be under serious pressure if its own card balance is growing, minimum repayments are absorbing cash flow, or other debts are competing for the same income. The recent RBA cash rate increase to 4.85 per cent also keeps the broader borrowing environment tight, particularly for households already managing mortgages, personal loans, car finance or buy now pay later commitments.

For people reviewing their options, the practical lesson is to focus on the full cost of the debt, not just the number of repayments. Listing balances, interest rates, annual fees, minimum repayments and repayment dates can make it easier to see which debts are costing the most. Debt consolidation may simplify payments in some situations, but it can also cost more over time if the new term is longer, fees are added, or old cards are used again.

General tools such as a debt consolidation calculator can help illustrate different repayment scenarios, although estimates are not approvals, quotes or personal advice. Readers dealing specifically with card balances may also find broader guidance on Managing Credit Card Debt in Tough Economic Times useful for understanding repayment habits, budgeting and hardship pathways.

The latest figures are a welcome sign that some Australians are reducing high-interest card debt. The next test will be whether that progress holds through the expensive end-of-year period, when travel, gifts, school costs and higher utility bills can quickly turn short-term spending into longer-term debt.