Yes, it’s deleveraging and it’s in Australia. Even Craig James can’t hide it:
Figures released from the Reserve Bank show that the average credit card balance rose by $1.20 (less than 0.1 per cent) to $3,130.40 in August. Compared with a year ago, the average credit card balance was down 2.0 per cent. In smoothed terms (12 month average) the average balance was down by 0.6 per cent – the biggest fall in 11 months.
Of credit cards attracting interest charges, the average outstanding balance fell by $9.40 in August to a 9-year low of $1,990.80. The average balance accruing interest is down by 4.7 per cent on a year ago. In smoothed terms (12 month average) the average balance was down by 4.6 per cent on a year ago – a nine month low.
The average credit card limit rose by $5.60 (or 0.1 per cent) to $9,061.90 in August. The average credit card limit rose by 0.3 per cent in the year to August. Usage of credit card limits has fallen to a 14-year low of 34.5 per cent in August (lowest since November 2001).
The average repayment per credit card fell from $1,690 to $1,599.10 in August. On average, there were 11.5 transactions made per each credit card account in August, up from 10.5 a year ago. The average value of purchases was $132.99 in August with the rolling annual average at $130.96 – a 10½ year low.
The number of cash advances recorded a 0.2 per cent annual fall in smoothed (12-month average) terms in August.
Plastic is not “fantastic” and credit is not “flattening”. Consumers not being “savvy” they have deep and structural revolving credit revulsion.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
Figures released from the Reserve Bank show that the average credit card balance rose by $1.20 (less than 0.1 per cent) to $3,130.40 in August. Compared with a year ago, the average credit card balance was down 2.0 per cent. In smoothed terms (12 month average) the average balance was down by 0.6 per cent – the biggest fall in 11 months.
