Australians have racked up a record $28bn in personal credit card transactions in December, according to new RBA data, leaving many households unable to clear debts and paying extreme interest charges. 

The Reserve Bank data, analysed by financial comparison site Canstar, show that Australians are struggling more than ever to clear purchases made on credit, amid high living cost pressures. 

Credit card debt accruing interest is on the rise on the back of pre-Christmas spending in a cost-of-living crisis,” said Canstar’s data insights director, Sally Tindall.

While some people use credit cards strategically to accrue loyalty points and other rewards, those with outstanding balances at the end of a month can pay interest rates exceeding 20%- plunging them into a cycle of debt.

Credit card debt, which is considered unsecured because it is not tied to an asset, has very high interest rates compared with other lending products like mortgages.

The December credit card statistics showed that “debt accruing interest” on personal credit cards increased by more than $236m from the previous month to $17.8bn, according to Canstar.

The level of interest-accruing debt has risen by about $526m from a year ago.