‘Essentials’ pile up on credit cards
DESPERATE Australians are resorting to paying their rent and bills using credit as they battle the rising cost of living.
While consumers have entered 2018 with a massive $51.2 billion in credit card debt – of which $31.6 billion is accruing interest – alarming findings from financial comparison site Mozo show that one in six Australians pays for essentials on plastic.
Consumers admit that relying on credit cards is their worst financial habit, with 24 per cent saying they use money they don’t have to pay for things, while 22 per cent conceded they had no cash reserves at all for emergencies.
Financial Counselling Australia’s executive director Fiona Guthrie said putting fixed expenses on credit is a “real worry”.
“Credit cards can be quite a dangerous product because they are hard to keep track; you make lots of small purchases over a long time and you get a bill once a month,’’ she said. “Unless you are tracking it regularly, that debt creeps up and that’s why twothirds of people don’t pay back the full balance, which is a large number of people.” PAGE 31: MONEYSAVER HQ