Careful, the cards can be stacked against you

CREDIT card junkies signing up to multiple offers could be harming their credit files and leading themselves down a path of financial mayhem.

Latest Reserve Bank of Australia data shows cardholders have amassed more than $52.4 billion on credit cards – and more than $31.8 billion is accruing interest.

But new findings from financial comparison website Finder.com.au have revealed 40 per cent of Australians have at least one card, 19 per cent have two cards and 8 per cent have three or more cards. The remaining 33 per cent do not have a credit card.

Crown Money Management’s chief executive officer Scott Parry said signing up to more than one card usually means multiple fees and also interest charges if the cardholder is not paying off their card in full each month.

“It’s tough to keep track of the cards and you will also be of the mindset you are not at the limit of your cards so you can still afford to spend,’’ he said.

“This is setting yourself up for failure.

“It can also reduce the amount of money you can borrow when you go to buy an actual asset like a home and your credit history makes you look like a credit junkie.

“When banks look at your credit file and see credit card, credit card, credit card there are massive alarm bells there.”

Many credit cards attract interest rates on above 20 per cent and some cards have annual fees that run into hundreds of dollars a year.

But Finder.com.au’s spokeswoman Bessie Hassan said having a number of cards only becomes a problem when the customer is not responsible.

“If you don’t pay them off on time and let your balances get too high – you could have a problem with plastic,” she said.

“Many people see a credit card as a rite of passage but outof-control balances can be a real barrier to your financial future.”

Comprehensive credit reporting now makes it easier for lenders to make an assessment of an applicant’s full credit history.