Frenzied spending during the Black Friday sales left many nursing credit card debt in the lead-up to Christmas.
Australia's credit card bill attracting interest charges inched higher by $21 million in December to $17.31 billion, Reserve Bank of Australia data shows, reflecting a big-spending November as consumers snapped up goods on sale.
RateCity research director Sally Tindall said the credit card damage could have been worse, with consumers compensating for the shopping spree by tightening belts in December.
A modest monthly decline in December spending was logged by the RBA after a record-breaking November.
"With this in mind, it's surprising we didn't see a bigger blowout in credit card debt in December," Ms Tindall said.
The credit card bill attracting interest remains lower than it was 12 months ago despite an increase in the number of cards in circulation.
The Black Friday and Cyber Monday sales have been growing in popularity each year, pulling festive spending forward.
Financial pressures have helped cement the trend by ratcheting up the importance of cheaper goods.
All households are under pressure but living cost indexes from the Australian Bureau of Statistics suggest workers are hurting the most.
Employee households - the most likely to be paying off a mortgage - are enduring the largest annual increases in living costs.
But ABS head of prices statistics Michelle Marquardt said the slowdown in the central bank's interest rate tightening cycle was helping to ease the annual pace of living cost growth felt by working households.
"While the Reserve Bank of Australia has implemented fewer cash rate increases in recent months, previous interest rate increases and the rollover of some expired fixed-rate to higher-rate variable mortgages continued to contribute to rises," Ms Marquardt said.
The bureau had mortgage interest charges rising 40.3 per cent annually through to December, well down from a peak of 91.6 per cent in the 12 months to the June quarter of 2023.
Other groups tracked in the selected living cost indexes include age pensioners, self-funded retirees, and other recipients of government support.
Self-funded retiree households - the group most likely to own their own homes and be insulated from rising borrowing costs and rents - recorded a smaller increase than other cohorts.
Their living costs still rose four per cent across the 12 months, reflecting strong price increases for items such as insurance and food.
The release of the latest selected living cost indexes - which are similar to the consumer price index but include changes in property prices and interest rates - followed the RBA's decision to keep the cash rate on hold at its February board meeting.
The no-change call was widely expected given annual inflation came in below expectations at the last print.
Economists broadly expect the next interest rate move to be down, in welcome news for stretched borrowers, although further hikes have not been ruled out.
Former RBA governor Bernie Fraser said the central bank was right to sit and wait for things to unfold.
He did not anticipate another interest rate hike given inflation was coming down and unemployment was creeping up.
"Those two things will suggest that it's more likely that interest rates would be adjusted downwards at some point in the future rather than pushed up again," he told ABC Radio on Wednesday.
Mr Fraser said there were still inflation risks to be mindful of, such as the conflict in the Middle East driving up the carrying cost of imported goods.
