Average Aussie Credit Card Debt is $3500
It has been reported by the Australian media www.news.com.au that an average Australian owes $3500 in credit card debt.
Think what $3500 might buy you – a second-hand car, a genuinely impressive large flat screen television, an foreign vacation or a few home loan repayments.
But for your average Australians that figure is the amount they owe on their credit cards.
Forget about “retail therapy”, now is the time to reign in and control your debt, says Edith Fink, business development manager of financial services website www.artog.com.au.
“People get into a cycle where they use their card to feed their desires or pay important bills but at the end of the month, they only pay back a little bit, not the whole amount,” she says.
“By the time they realise they are really deep in this relationship, it’s too late to call it off.’
Author Allison Tait agrees.
“The thing with credit cards is that they assume an importance in our lives that takes them far beyond an innocuous piece of plastic in our wallet, directly to the heart of the way we live.”
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Tait’s new book Credit Card Stressbusters offers some debt management strategies to help you control that plastic relationship.
“Credit card debt is debt without end,” she says.
“People’s biggest problem is that if they don’t have a plan for that debt, it just keeps rolling on.”
Chapter 10 explains to you the power of compound interest, or if you don’t pay off your $100 purchase at month end, it suddenly attracts interest and becomes a $120 purchase – that totally blows the “on sale” concept out of the water.
Many people in their twenties and thirties with credit card debt just don’t know where to start to solve these problems, that’s why Tait wrote the book.
“They put their head in the sand and hide from it. They don’t read their statements, don’t know their interest rate, don’t know how to get the best credit card for them, don’t know how to manage their cards so that they are in control of the relationship.
“The classic problem is they get a second credit card with low transfer rate to pay off their first credit card. Great idea, but you need to close the account you make the transfer from and not use the second card for any more purchases. During the low interest period, be strict and pay your credit card off in full.”
Fink says it’s all about finding the best card to suit your needs, so you should shop around to find the best deal: low interest rates versus reward programs versus no annual fee versus low transfer rates.
News.com.au
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