Sydney, 24 July, 2007:  While the total balance outstanding for credit cards was $40.2 billion at the end of May 2007, an important point to note is that annual repayments are greater than new spending.
 
Latest data for the 12 months to the end of May 2007 show that repayments exceeded new spending by $1.25 billion. 

Chief Executive Officer of the Australian Bankers’ Association, Mr David Bell said it is important to remember that this balance is affected by growth in the number of customers using credit cards and price changes for goods and services purchased.

“It is not unusual that this balance grows over time, as evidenced by over 20 years of Reserve Bank of Australia (RBA) statistics,” he said.

“While credit cards are used for spending, this is only one side of the credit card story.  Consumers also make repayments on their credit cards.  The relationship between new spending activity and repayment activity is a good indicator of how credit card holders are managing their use of credit cards.”

RBA statistics demonstrate strong repayment activity by credit card customers.  For the past 27 consecutive months (since March 2005), annual repayments have exceeded annual new spending.  The previous long run of such repayment activity was in 1996-97 lasting for 12 consecutive months.
 
Mr Bell said, “While the aggregate data indicates sound management of credit cards by the vast majority of card customers, it is important that those people who experience difficulties contact their financial institution as early as possible. Consumers should also ensure that they select the credit card that best suits their budget and individual needs”.

For further information:
Kerrina Lawrence
ABA Public Relations
Phone: 02 8298 0411
Mobile: 0417 034 738