The decline in credit card activity, which has prompted one commentator to describe the credit cards as a “legacy product”, has taken on serious proportions, with banks’ credit card balance falling by more than 20 per cent over the past two years.
The latest APRA banking data shows falls in credit card balances of as much as 35 per cent over the two years to April 2021 and only a handful of credit card issuers reporting an increase in their balances.
Bank Australia’s credit card book has lost 35 per cent of its value over that period, although it has picked up a little over the past 12 months. Australian Military Bank’s credit card book is down 34 per cent.
Among the big banks, Westpac has had the biggest decline, with its credit card balance down 29 per cent over two years.
ANZ’s credit card book is down 25 per cent, CBA’s is down 22 per cent and NAB’s 28 per cent.
Citibank, which has run a successful white label credit card operation for a long time in Australia, is down 26 per cent over two years.
Among the handful of card issuers whose balances have grown over the two years, P&N Bank is up 15 per cent, Regional Australia Bank is up 12.2 per cent.
Reserve Bank figures show that the value of transactions on personal credit cards has remained fairly steady over the past two years but balance accruing interest have fallen by around 30 per cent over two years.
Consumers don’t mind using credit cards as a payment method but they don’t want to go into debt.