Credit card debt in Australia: why balances stall, what it really costs, and how to clear it
Continues on MyBudget’s official website.
Get your credit card debt under control with a tailored plan and pay it off faster. The first appointment is free, with no long-term lock-in contracts. Call 1300 300 922.
“MyBudget helped us pay off five credit cards and start saving for a home.” — Megan & Creagh, MyBudget clients
What credit card debt costs in Australia
Credit cards are among the most expensive forms of borrowing. According to Finder, the average credit card balance is $3,443, and the average card charges close to 20% per annum.
More than one in three Australian credit card holders leave part of their balance unpaid each month — around 2.44 million Australians, or 11% of the adult population.
Why the balance barely moves
Minimum repayments are deliberately set low, so most of each payment goes to interest rather than principal.
Repayment time and total interest depend on the balance, interest rate, fees and how repayments change as the balance falls. Check the repayment information on your card statement.
Seeing that little progress month after month produces what is often called debt fatigue, which is why people abandon repayment plans that were technically working.
What actually clears a card
- Pay more than the minimum where affordable to reduce the principal faster and lower total interest
- Stop adding to the balance while you pay it down, or the two cancel out
- Target the most expensive card first (the avalanche method), or the smallest balance first if early wins keep you going (the snowball method)
- Ask about hardship arrangements if you are struggling — creditors are obliged to consider them
A word on balance transfers
A zero-interest balance transfer moves debt rather than reducing it. Unless spending changes alongside, the original card tends to refill — leaving two balances instead of one. Megan and Creagh tried exactly this before joining MyBudget and ended up with more cards and more unsecured debt.
How MyBudget helps
A tailored budget plan
A realistic plan based on your actual income and expenses, designed to reduce your reliance on credit so the balance stops growing while you pay it down.
Affordable arrangements
If you are in arrears, MyBudget contacts your creditors to discuss your situation and work towards affordable payment arrangements — which also reduces the stress of unwanted calls.
Consolidation where it genuinely helps
Consolidation can reduce total repayments and free up cash flow. It is explored rather than assumed, because a longer term can increase the total cost.
Bills stay prioritised
Your budget keeps living expenses and bills paid while the debt reduces, so clearing the cards does not quietly create a different problem.
Questions about credit card debt
How can MyBudget help me pay off credit card debt faster?
MyBudget creates a personalised credit card repayment plan that budgets your bills, lifestyle costs and debt in one place. This ensures your income is allocated correctly so you can pay off credit card debt faster without relying on credit again. Structured repayments help reduce stress and support long-term financial goals.
Can MyBudget speak to my creditors for me?
Yes. MyBudget can contact your creditors, negotiate manageable repayment plans and help reduce collection calls. Clear communication with creditors supports a smoother credit card repayment process and allows you to focus on paying down your credit card debt without added pressure.
Will joining MyBudget improve my credit score?
Many clients see their credit score improve because consistent on-time payments reduce missed or late repayments. A structured credit card payment plan helps rebuild your credit file, strengthens your credit report and supports your overall financial position as you pay down credit card debt.
Do I need a loan to pay off my credit card debt?
No. You don’t need a loan to pay off credit card debt. MyBudget creates a realistic credit card repayment plan using your existing income. Credit card consolidation or loan options are only considered if they genuinely lower repayments and support your financial goals.
What if my credit card debt feels too overwhelming?
Feeling overwhelmed by credit card debt is common. MyBudget reviews your full financial situation, explains your credit card debt solutions clearly and creates a simple payment plan you can follow with confidence. We help you understand your options and take control of your repayments.
Can I still enjoy my lifestyle while paying off debt?
Yes. Your personalised budget balances credit card repayments with your lifestyle. MyBudget helps you pay off credit card debt while still budgeting for the things that matter to you. This ensures your repayment plan is realistic, flexible and sustainable long term.
Important information
This page provides general information only. It does not take your personal circumstances into account and is not personal financial advice. For the scope and licensing of a particular service, check the service provider's current disclosures or contact MyBudget.
Free, independent and confidential financial counselling is available from the National Debt Helpline on 1800 007 007, and ASIC’s MoneySmart website publishes free guidance. MyBudget is not a registered debt agreement administrator; where a Part 9 debt agreement appears suitable, MyBudget can refer you to its sister company MyDebtSolutions, which is a registered administrator.
Call MyBudget on 1300 300 922 for a free, confidential, no-obligation appointment. Your personalised 12-month budget is free and yours to keep.
Get budgeting support
Why is credit card debt so difficult to pay off?
Credit cards are among the most expensive forms of borrowing in Australia, charging close to 20% per annum on average. Minimum repayments are deliberately set low, so most of each payment goes toward interest rather than reducing the principal balance, meaning the debt barely shrinks over time.
What is the average credit card balance in Australia?
According to Finder, the average credit card balance in Australia is $3,443, with the average card charging close to 20% per annum in interest.
How many Australians carry unpaid credit card balances?
More than one in three Australian credit card holders leave part of their balance unpaid each month, which equates to around 2.44 million Australians, or 11% of the adult population.
How long could it take to pay off a $5,000 credit card debt using only minimum repayments?
Repayment time depends on the interest rate, fees, new spending and the repayment rule. Check your card statement for its minimum-repayment estimate. A fixed payment and a minimum payment that decreases with the balance produce different results.
What is 'debt fatigue' and why is it relevant to credit card debt?
Debt fatigue is the discouragement that results from seeing little progress on debt repayment month after month, which is why people often give up on repayment plans that were technically working.
How does MyBudget help people with credit card debt?
MyBudget builds a tailored budget plan based on your actual income and expenses to reduce reliance on credit cards, contacts creditors on your behalf to arrange affordable payment plans if you're in arrears, explores credit card consolidation where it genuinely helps, and keeps your living expenses and bills prioritised while the debt reduces.
Is credit card consolidation always a good idea according to MyBudget?
No. MyBudget explores consolidation rather than assuming it's beneficial, because consolidating a short-term debt into a longer-term loan can lower the monthly repayment while actually increasing the total amount paid overall.
What can I do today to start reducing my credit card debt?
Check your card balance, interest rate and fees. Paying more than the minimum where affordable can reduce the balance faster. Avoid adding new spending and contact your provider if repayments are difficult.
Is MyBudget a licensed financial adviser or debt agreement administrator?
For licensing, registration and the scope of advice available from a particular service, check the relevant provider's current disclosures or contact MyBudget directly. This page provides general information only and does not take your personal circumstances into account.
Where can I get free, independent financial counselling for credit card debt?
Free, independent and confidential financial counselling is available from the National Debt Helpline on 1800 007 007. ASIC's MoneySmart website also publishes free guidance on credit card debt.
How do I get started with MyBudget for credit card debt help?
Call 1300 300 922 for a free, confidential, no-obligation appointment. You'll receive a personalised 12-month budget, which is yours to keep either way, and there are no long-term lock-in contracts.