Festive follies

Credit card trap alert

FRIVOLOUS Christmas shoppers are being warned to watch the massive amounts of credit card debt they are tipped to rack up this festive season leaving them with serious debt in 2018.

With just five weeks to go until Christmas, the annual spending bonanza has well and truly started and it’s expected keen shoppers will spend $56 billion on credit in November and December — or a whopping $3342 per person.

Financial services firm Canstar said this is a billion dollars more than the same period last year and with credit card interest rates as high as 25 per cent this can hit customers hard.

The nation is already buried in severe plastic debt — Reserve Bank of Australia figures show Australians have $51.4 billion owing and more than $31.4 billion is accruing interest.

Canstar spokesman Steve Mickenbecker has warned the dangers of credit card debts that can’t be paid off in full.

“Back in 1996 Australians spent only $3 billion on their credit cards in the month of December,’’ he said.

“Fast forward 20 years to December, 2016 and we are spending more than nine times that at $28 billion.

“If you do you use the credit card this Christmas then set a payment plan to make sure you pay down the debt as soon as possible.”

Canstar figures show someone who spends $3342 this festive season on plastic with an average interest rate of 17 per cent and pays only the minimum amount off will pay $3800 in interest and it will take 18 years and 3 months to pay off.

And for shoppers hunting for discounted goods, Deloitte’s Retailers’ Christmas Survey, released today, found stores won’t be as eager to offer discounting ahead of Christmas Day.