10 November 2025
OurTop10.com.au's analysis of the just-released RBA Retail Payments data reveals credit card balances accruing interest have surged to $18.43 billion, the highest level since July 2021, as cost-of-living pressures push Australians deeper into debt at a time when many are trying to enter the property market.
September 2025 saw personal credit card balances accruing interest jump 5.6%, the largest monthly increase in more than 14 years since January 2011. This adds nearly $1 billion to the debt burden of everyday Australians, translating to an additional $15 million per month flowing from consumers to banks at the common interest rate of 18% per annum.
The surge marks a dramatic reversal from the years leading to 2021, when Australians aggressively paid down credit card debt to maximise their borrowing capacity for home loans. That strategic debt reduction is now unwinding as cost-of-living pressures force households back into expensive credit card debt.
Mortgage applications under pressure
Simon Ma, CEO of OurTop10, says the debt spike creates a critical challenge for aspiring homeowners navigating an already difficult market.
"Credit card debt is one of the most overlooked barriers to mortgage approval. Banks assess your credit limits and how you manage debt. Even if you pay on time, high limits reduce how much they'll lend you. When you're carrying balances that accrue interest, that's a massive red flag," he says.
Cost-of-living crisis deepens
Despite credit card spending growing 34% over four years, debt levels remained below $18 billion for almost every month during that period. The sudden spike signals mounting financial distress as inflation pressures persist.
"The best mortgage brokers will help clients develop a clear strategy to manage their credit card debt before applying for a mortgage. This might mean paying down balances, reducing credit limits, or restructuring debt entirely. Getting this right can mean the difference between approval and rejection," Simon says.
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