The real cost of credit card debt in 2026

Published 11 August 2026 · DeMarque Home Loans

As at June 2026, Australians are being charged interest on $21.56 billion of credit card debt, at an average rate of 18.61% p.a. If some of that is yours, the maths below is worth two minutes of your time.

Card debt behaves differently from every other debt you have.

Why card debt is so sticky

Credit cards are built around the minimum repayment — typically around 2–2.5% of the balance. Pay only that, and most of each payment goes to interest while the balance barely moves; clearing a five-figure balance at minimums takes decades, not years.

Even paying a solid fixed amount, the rate does heavy damage: a $12,000 balance at 20% p.a., paid down at $300 a month, takes about five and a half years to clear and costs roughly $7,900 in interest — two-thirds of the original debt again.

The comparison that stings

That same $12,000 at a home-loan rate of 6.0%, paid at the same $300 a month, is gone in about three years and nine months with around $1,400 in interest.

Same debt, same monthly effort — the rate is the whole difference. That’s the logic behind consolidating expensive debts into your home loan, and it’s why the strategy matters: consolidation only wins if you keep up the repayment pace rather than stretching the debt over the life of the mortgage.

Your realistic options, in order of effort

Attack it directly. Highest-rate debt first, every spare dollar. No approvals needed, works immediately.

Balance transfer. A 0%-for-X-months card can buy breathing room — if you clear the balance within the promotional window and don’t spend on the new card. Transfer fees and revert rates are where these go wrong.

Consolidate into the home loan. The biggest rate drop available to a homeowner. Run your numbers through the debt consolidation calculator — it shows both the good version and the trap.

Get the whole picture looked at. If the card is one of several pressures, the free home loan health check looks at your loan and debts together, and we can talk through what’s actually available to you.

One habit change that outranks all of it

Whatever route you take: the limit is the risk, not just the balance. Lenders assess your card limits when you apply for anything, and an open limit is an invitation to refill. Cutting limits as balances fall locks the progress in.