‘Es­sen­tials’ pile up on credit cards

The Advertiser - - NEWS - SO­PHIE ELSWORTH

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

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