National credit card debt up by 8%

Date
    April 21, 2014


Australians spent a record $70.1 billion on credit cards between December and February - almost 8 per cent more than during the previous summer.   :(      

Reserve Bank of Australia data shows spending on credit leapt from $65 billion, following three years of more gradual increases.

As of February credit card holders were still almost $50.2 billion in the red - the highest debt level seen since June 2012. It included $35 billion in accruing interest.

Financial Counselling Australia executive director Fiona Guthrie said clients were increasingly asking for advice about debt on multiple credit cards, compared to five years ago when it was more common to have only one or two cards.    


''You can almost certainly assume that people who have credit card debt are struggling to pay their utilities, telco bill, that they have consumer leases, or may be behind on their rent or mortgage,'' she said.

''We see people when they can't pay their credit card debt, which is usually a result of a change in their circumstances, a person loses their job or a relationship breaks down.''      :(

Modelling by comparison website Creditcardfinder found it would take 18 years to pay off an average credit card balance of $2247 accruing interest at 17 per cent if only minimum payments were made.

Edward Manuel, 56, has struggled for the past six years to cut down his credit card debt, which hovers between $7000 and $9000.      :(

''I feel like I'm trying to walk against the wind,'' said Mr Manuel, who lives in public housing in Thornbury and uses his credit card to pay for bills that he cannot cover on his disability pension.      :(

''I make my monthly repayments but I get nowhere. I've tried to change to low interest but they don't let me because I have a low income and a pre-existing medical condition.''

Mitchell Watson, of finance research company Canstar, said credit card users often fell into bad habits and could be unaware of better rates on offer.

''Interest rates range from as low as 8.99 per cent to perhaps as high as 21 per cent so it's quite a large difference and that can have a material impact on how much interest you are paying per month,'' he said.

Read more: http://www.theage.com.au/victoria/national-credit-card-debt-up-by-8-20140420-36yx1.html#ixzz2zSm1CGhH

I've never been a fan of credit cards, so much so that I do not even have (or want) one.

BUT...

It's well past time it was mandated that banks make available a special low-interest (<5%)
CC with a (for example) $2000 limit, especially for the 'working poor' and welfare recips.

Make it so you are ineligible if you receive more than $20k p/a.

Of course, if the dole was raised to somewhere approaching subsistence levels, many people
wouldn't need to max-out their CCs just to pay the bills.

Ultra-low-interest credit for those on under $20k/year should have been mandated many
years ago.

If you cant afford something, don't buy it...

The Heartless Felon wrote on Apr 21^st, 2014 at 9:39am:

If you cant afford something, don't buy it...

a concept rarely understood.  whats the bed he has a smartphone, a big TV and a suite of video games plus a tablet and/or computer.

Kat wrote on Apr 21^st, 2014 at 9:14am:

I've never been a fan of credit cards, so much so that I do not even have (or want) one. BUT... It's well past time it was mandated that banks make available a special low-interest (<5%) CC with a (for example) $2000 limit, especially for the 'working poor' and welfare recips. Make it so you are ineligible if you receive more than $20k p/a. Of course, if the dole was raised to somewhere approaching subsistence levels, many people wouldn't need to max-out their CCs just to pay the bills. Ultra-low-interest credit for those on under $20k/year should have been mandated many years ago.

... and zero bank fees for those on NoStart/DSP/Aged Pension etc and under a certain amount of income.

Tax the rich - I like to hear them bleat!

Kat wrote on Apr 21^st, 2014 at 9:14am:

I've never been a fan of credit cards, so much so that I do not even have (or want) one. BUT... It's well past time it was mandated that banks make available a special low-interest (<5%) CC with a (for example) $2000 limit, especially for the 'working poor' and welfare recips. Make it so you are ineligible if you receive more than $20k p/a. Of course, if the dole was raised to somewhere approaching subsistence levels, many people wouldn't need to max-out their CCs just to pay the bills. Ultra-low-interest credit for those on under $20k/year should have been mandated many years ago.

yes. because thats what people with low incomes should be doing, borrowing money.  ::) I cant wrap my head around the way some of you people think.

The Heartless Felon wrote on Apr 21^st, 2014 at 9:39am:

If you cant afford something, don't buy it...

Like electricity?

Garfield wrote on Apr 22^nd, 2014 at 3:00am:

The Heartless Felon wrote on Apr 21st, 2014 at 9:39am: If you cant afford something, don't buy it... Like electricity?

If you are on a fixed income it would seem prudent to pay a little on energy bills each time you receive a payment. No big bills...no need for a credit card.