Aussies pay down card debt

Townsville Bulletin - - NEWS - AN­THONY KEANE

CON­SUMERS are show­ing a com­mit­ment to crush­ing their credit card debt and are avoid­ing the temp­ta­tion of ris­ing card lim­its for this ex­pen­sive form of bor­row­ing money.

A new anal­y­sis of Re­serve Bank of Aus­tralia data has found that while credit card lim­its have jumped 10 per cent to a mas­sive to­tal of $ 152 bil­lion in the past five years, bal­ances that are be­ing charged in­ter­est have dropped 11 per cent to $ 32.8 bil­lion.

This is de­spite the re­cent rise in credit card use as tap- and- go pay­ments surge in pop­u­lar­ity. It is still a huge na­tional in­ter­est bill – about $ 6.5 bil­lion a year or al­most $ 400 per credit card – but debt spe­cial­ists say con­sumers are on the right track.

Credit cards typ­i­cally start charg­ing in­ter­est on pur­chases once their in­ter­est- free pe­riod ex­pires – usu­ally up to 55 days af­ter the sale.

“Card­hold­ers are ex­er­cis­ing dis­ci­pline and get­ting se­ri­ous about pay­ing off their credit cards,” Bessie Has­san, spokes­woman for com­par­i­son web- site Fin­der. com. au, said. Fin­der. com. au’s re­search found the num­ber of pur­chases made on credit cards had jumped 57 per cent in the past five years, and that con­sumers were mak­ing an av­er­age 30 credit card trans­ac­tions a month. Av­er­age card­hold­ers re­paid $ 43,532 on their credit cards in the past 12 months, more than their pur­chases.

“Aus­tralians are be­ing quite proac­tive in chip­ping away at their debt,” Ms Has­san said.

Separate re­search by credit agency Equifax has found that credit card ap­pli­ca­tions had in­creased in all states dur­ing the June quar­ter.

“The av­er­age value amount a con­sumer ap­plies for on a credit card has dou­bled in the past three years,” Equifax se­nior gen­eral man­ager of con­sumer prod­ucts An­gus Luff­man said.

“Yet, in the same pe­riod, the to­tal credit card bal­ances ac­cru­ing in­ter­est have de­clined. “This sug­gests con­sumers are us­ing credit cards more fre­quently while also be­ing care­ful not to add to the debt load.”

Moneysaver HQ: starts p18

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