Demand for credit cards jumped 13.5 per cent in the March quarter amid a flurry of bank special offers and improving consumer confidence, new research by credit information company Veda has found.

Veda’s general manager of consumer risk, Angus Luffman, said the surge in credit card applications was the strongest since 2006 but Australians’ overall credit card debt remained steady.

People were using their credit cards more frequently to take advantage of innovations such as contactless payments, but were spending less on each transaction and treated their cards as payment tools to take advantage of zero per cent balance transfer deals, he said.

Mr Luffman said consumer confidence had benefited from February’s official interest rate cut, and “a lot of major credit card issuers are running low-interest or balance-transfer campaigns at the moment”.

PLAN OF ATTACK: Cull that credit card debt in five easy steps

Reserve Bank of Australia figures show Australians owe a combined $51 billion on credit cards, and $33 billion of that is accruing interest, costing consumers more than $540 million a month.

Average interest rates between 17 and 20 per cent make credit cards very profitable for lenders.

David Boyd, co-founder of creditcardcompare.com.au, said banks had also made it easier and faster for people to apply for new credit cards.

“We are seeing much better offers being brought to the market. You have got zero per cent for up to 24 months on a balance transfer,” he said.

Mr Boyd said Australians’ overall credit card debt was still a concern. “Credit cards are wonderful when used properly, but if people aren’t diligent and disciplined in how they use these things they can burn a hole in your pocket,” he said.

“Always pay more than the minimum repayment. Don’t get trapped in the cycle of just repaying the minimum term as it will take forever to pay off.”

The Veda Quarterly Consumer Credit Demand Index, released today, also found that personal loan applications dropped 5.2 per cent in the March quarter.

“Any return to growth is likely to be linked to growth in vehicle purchases,” Mr Luffman said.