Credits cards are beginning to lose its touch as Australians now opt cash and debit cards instead.

In a report released by the Reserve Bank of Australia, the usage of credit cards decreased to almost 17 per cent in the last five years while card transactions only reached up to 40 per cent.

Debit cards, on the other hand, increased its usage up to 30 per cent in the past 12 months. Analysts explained that the sudden switch is due to the benefits and affordable schemes that are offered by banks and credit unions.

"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,'' said senior analyst Harry Senlitonga of Datamonitor.

Now, Australians pay using their own money, such as a debit scheme card or even Eftpos instead of borrowing through credit.

The high interest rates and credit card fees are also one of the reasons why people now avoid credit cards. Debit cards, meanwhile, do not have interest fees because transactions are taken from existing savings.

Senlitoga warns that if the trend continues, the credit card industry may be facing a huge setback and is expected to decrease its revenues to 40 per cent.

An EFTPOS (Electronic Funds Transfer at Point of Sale) transaction of Woolworths is another trend that is keeping Australians away from credit cards.

Before, debit card customers of Woolsworth select the credit card option to pay for goods and are charged with a credit processing fee. Now, Woolsworth avoids the fee and the payment will be counted as the customer's Eftpos transaction.

The only hindrance is that retailers will be charged a fee by the bank if they exceed the free transactions each month.

Consumer Action Law Center director Nicole Rich suggests that customers should check their bank accounts if they have unlimited Eftpos transactions.