May 07

Credit card debt

Credit Card Debt Shrinking

According to an article in Business Spectator 13 March 2012, Reserve Bank of Australia Statistics for January 2012 (released 12 March 2012) Australian ATM withdrawals shrank in January 2012 and were the smallest for any month of January over the past six years.   Additionally it appears that consumers are increasingly reluctant to take on personal debt, with new figures showing that the average credit card limit over the past 12 months at the slowest growth in 17 years.

Australians appear to be conservative consumers now with consumer purchases more likely to be put onto debit cards rather than credit cards.  The average credit card balance in January 2012 fell to $3,263.  This compares with the average credit card debt per household in the US of $15,799 (source:

The following is some history of credit cards. 

In America:

  • The first widely accepted plastic charge card was issued in 1958 by American Express.
  • The first general-use credit card that allowed balances to be paid over time was the BankAmericard  was issed in 1959 (which in 1977 changed its name to Visa).  (Sources: PBS Frontline; American Express, Visa USA)
  • How did MasterCard begin? In 1966, a number of banks formed the Interbank Card Association. In 1969, the Interbank Card Association bought the rights to use "Master Charge" from the California Bank Association. It was renamed MasterCard in 1979. (Source:
  • It is interesting to note that , unlike Australia, the use of personal cheques is still very common in the US as it is in parts of Europe.

In Australia:

  • In the early 1970s there were a few charge cards available, such as individual store cards (eg. David Jones), American Express and Diners Club.
  • In 1972 the Reserve Bank gave approval for the major Australian banks to set up a credit card and in October 1974 Bankcard, a national credit card service,  was launched.  Within 18 months there were 1,054,000 cardholders with 49,000 merchants accepting Bankcard.  Since it was thought there would be strong resistance, many bank customers were mailed a Bankcard with $300 of pre-approved credit.
  • From the outset each member bank issued its own variant of the then universal Bankcard card, and was solely responsible for the administration of its own credit rules and customer relations with its cardholders.  So competition between the banks was maintained.
  • Fourteen years after the launch of Bankcard, the exceptional growth of credit card operations and the improvements in technology finally allowed member banks to perform their own data capture and in-house processing.
  • The last Bankcard transaction was made in December 2006 and the Bankcard scheme was closed on 20 April 2007.
  • The demise of Bankcard came with other companies, such as Visa and MasterCard offering credit cards in Australia.  Unlike Bankcard these cards were accepted overseas.

Until the mid 1990s there were no fees on Australian credit cards.  Annual fees were only allowed to be charged on charge cards (such as American Express) which had no interest fees and had to be paid off in full within a certain period after the statement date.  These rules are no longer and there are many options available (and charges) by banks.



Speak with your Newcastle financial advisor to see how we can help reduce your credit card debt.

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