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By: Staff Reporter
According to ABS figures, credit card use dropped almost 17 per cent in the past five years and now accounts for just under 42 per cent of all card transactions.
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Debit scheme cards, which are increasingly being offered by banks and credit unions, are the main reason for the trend.
"Debit scheme cards give consumers the best of both worlds; accessibility of a credit card and they allow the consumer to use their own money,'' Datamonitor senior analyst Harry Senlitonga told the Daily Telegraph.
According to Mr Senlitonga, other factors behind the increase in debit card use are the high credit card fees and interest rates charged.
In contrast there is no interest and usually no fees involved with a debit card because the money is being taken from existing savings. If there is no money in the savings account, the transaction will not be accepted.
There are more than 275 million card transactions every month throughout Australia, of which 116 million are attributed to credit cards.
Mr Senlitonga said if the trend continues, the credit card market share could fall below 40 per cent.
