Analysis of the just-released RBA Retail Payments data reveals credit card balances accruing interest have surged to $18.43 billion, the highest level since July 2021, as cost-of-living pressures push Australians deeper into debt at a time when many are trying to enter the property market.

September 2025 saw personal credit card balances accruing interest jump 5.6%, the largest monthly increase in more than 14 years since January 2011. This adds nearly $1 billion to the debt burden of everyday Australians, translating to an additional $15 million per month flowing from consumers to banks at the common interest rate of 18% per annum.

The surge marks a dramatic reversal from the years leading to 2021, when Australians aggressively paid down credit card debt to maximise their borrowing capacity for home loans. That strategic debt reduction is now unwinding as cost-of-living pressures force households back into expensive credit card debt.

Cost-of-living crisis deepens

Despite credit card spending growing 34% over four years, debt levels remained below $18 billion for almost every month during that period. The sudden spike signals mounting financial distress as inflation pressures persist.