Australian credit card holders are working harder at paying down their debts, following new figures from the Reserve Bank of Australia (RBA) analysed by Australia's leading financial comparison website RateCity (www.ratecity.com.au).

• Credit card repayments in May was one of the highest on record at $22.58 billion
• Credit cards still most common payment method despite drop in growth
• Most card providers kept rate cuts: compare and switch!

The data, released yesterday (July 12, 2012), showed that credit card repayments increased by $1.7 billion in May compared to April, to $22.58 billion. This was one of the highest total repayments ever recorded, according to RateCity.

Credit card debt that costs card holders interest has also dropped, by more than $273 million compared to April.

Credit cards continue to be the most popular transaction method for Australians, with a combined $22.61 billion spent in May, while we spent about $15 billion using our scheme debit and EFTPOS cards. It was also the second-highest month on record for credit card transactions, behind December 2010 which saw $22.88 billion spent on credit cards.

This is despite a significant drop in year-on-year credit card balance growth to around 2 percent over the past year, compared to over 10 percent before 2008.

Michelle Hutchison, Spokesperson for RateCity, said some credit card holders are relying less on their credit cards to get by.

"There are over 15 million credit card accounts open and over 152 million transactions made in May alone. Despite the popularity of credit cards, we're beginning to rely less on them to get by, which means more card holders are paying them off during their interest-free period or paying interest on a smaller balance.

"Cash advances are also a good indication of this, with over $1 billion of cash withdrawn from cards on average each month from 2006 to 2008, to $858 million in May (see graph below)."

Ms Hutchison said credit card holders could potentially save more money by shopping around for their cards and switching to a cheaper deal.

"While it's great to see more discipline taken with credit card spending and paying off debts, there are many card holders who have missed out on rate cuts and are paying too much interest.

"For instance, since the Reserve Bank dropped the cash rate by a total of 75 basis points in May and June, only 39 personal credit cards in RateCity's database of more than 200 cards (18 percent) have dropped their rates since May. In fact, 12 cards have increased their rates by 50 basis points.

"Card holders should find out what interest they are paying and compare deals using credible financial comparison websites like RateCity and switch to a better deal."

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For Further information please contact:

Michelle Hutchison

PR Manager & Spokesperson

Tel: +61 2 8917 8005

Mob: +61 403 192 994

Email: michelle.hutchison@ratecity.com.au

About RateCity

RateCity (www.ratecity.com.au) is Australia's best financial comparison website, where Australians can easily search, compare and apply for over 13,000 financial products - from credit cards to home loans to car insurance - from over 250 institutions. Our job is to take the hassle out of finding the right financial products online - saving our users both money and time.

RateCity is a private company with an AFS Licence (AFSL: 316 710), powered by CANSTAR, in partnership with Mi9.

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