SQUEEZED households are relying on their credit cards to pay for day-to-day necessities including groceries and bills, new figures show.
As the nation’s credit card bill sits at a staggering $51.3 billion consumers are using plastic just to complete their weekly supermarket shops and pay their utility bills with many people failing to wipe their debt each month.
New statistics revealed by financial comparison website finder.com.au which quizzed more than 2000 Australians showed groceries account for about 25 per cent of all credit card spending, followed by utitily bills (16 per cent), general shopping (16 per cent) and entertainment (10 per cent.)
Consumer finance expert Lisa Montgomery warned as shoppers continue to shift away from paying with cash, more consumers are paying with plastic which made it more difficult to monitor spending.
“Consumers have made almost a full transition to cashless transactions and this has naturally included the weekly grocery bill,’’ she said.
“The downside of this is that when you spend on a card, it’s easy to overspend as you are not limited by a cash amount in your wallet.â€
Data from global research firm RFi’s Global Payments Evolution Study showed the decline of cash is continuing in Australia with about 40 per cent of Australians envisaging a cashless society to become a reality.
While some card customers use their credit card and manage to pay it off in full each month to escape any interest charges, the nation still has more than $32.1 billion in card debt that is accruing interest.
The average credit card rate is about 17 per cent but some card rates are as a high as almost 30 per cent.
Finder.com.au spokeswoman Bessie Hassan said credit card pain was continuing to be felt by consumers racking up debt just to buying food.
“Groceries are already expensive enough without having to paying interest on them,’’ she said.
“The average Australian credit card has $3095 in credit card debt, 63 per cent of which is burdened with accruing interest.â€
Ms Montgomery encourages consumers to set a budget for their weekly grocery shop and review monthly credit card statements to see where they can reduce their spending on plastic.