Credit card debt is soaring, hitting levels not seen in years, and it's a wake-up call for many. According to recent data from the RBA (released November 7, 2025, based on September 2025 figures), the amount of interest-accruing credit card debt is climbing. This should be a concern for everyone.
Imagine this: if someone is only making the minimum payment on their credit card, and they have the average debt at the average interest rate of 18.61%, they could end up paying a staggering $15,891 in interest. To make matters worse, it could take almost 40 years to pay off the debt. And that doesn't even include annual fees or any new purchases!
But there's a much better way. If the same person could pay an extra $150 per month, they could save approximately $13,596 in interest and pay off their credit card debt in just 4 years and 3 months – that's over 34 years earlier!
Here's a quick comparison:
| | Total Interest Charges | Time to Repay |
| :------------------------------- | :--------------------- | :-------------------- |
| Minimum Repayments | $15,891 | 39 years, 1 month |
| Higher Repayments (+$150/month) | $2,295 | 4 years, 3 months |
| Savings | $13,596 | 34 years, 10 months |
Important Note: These calculations are based on RBA credit card statistics, assuming that 30% of accounts have debt accruing interest. They also account for people with multiple credit cards, according to a 2025 Canstar survey. The average debt amount is $5,330. Interest calculations use the RBA's average rate of 18.61%, assuming a minimum monthly repayment of 2% or $20.
Laine Gordon, a spokesperson for Canstar, highlights the issue, stating, “It’s concerning to see credit card debt climbing back to levels we haven’t seen since July 2021 – a clear sign more households are leaning on plastic to get by.”
The data shows that interest-accruing credit card debt increased in eight out of twelve months over the past year. This indicates that many Australians are struggling to manage rising costs. While spending dipped slightly in September after a record-high the previous month, spending is still significantly higher year-on-year. This suggests that some people are relying on credit to cover their expenses.
And this is the part most people miss... The average interest rates on credit cards are above 18%. At these rates, it's no surprise that many people find it hard to reduce their debt.
If you're stuck with credit card debt, there are options. Consider a card with a lower ongoing interest rate. There are at least seven banks offering cards with rates under 10%.
Paying only the minimum is a trap. While it might seem manageable in the short term, it can cost you thousands in interest and trap you in debt for decades.
Even small extra payments can make a huge difference. Adding an extra $150 a month could save you over $13,000 in interest and help you become debt-free over 30 years sooner.
Finally, remember you don't have to face this alone. The National Debt Helpline is a free service that can connect you with a financial counselor to help you create a plan and get rid of your credit card debt.
What are your thoughts? Do you think enough is being done to help people manage their credit card debt? Have you found any strategies that have worked for you? Share your opinions in the comments below!
