Why Do We Use Credit Cards?
We Australians love the mateship, sports, helping others etc. At the other end of the spectrum what we also love is being in debt. Australians have one of the world’s highest if not the highest debt to disposable income ratio. This is getting us closer and closer to a crisis which is not visible to the common eye.
According to the Courier Mail, Australia owes more than $36 billion on their credit cards and this debt is growing at a rapid rate by the day. This works out to be roughly $4757 per cardholder. With the average credit card rate of interest at roughly 18%, it is the most expensive debt one can get into.
With the rate of interest and an average debt of $4757, an individual making only minimum monthly payments will roughly take close to 48 years to be free from credit card debt and in the process paying roughly $13000 in interest charges to be credit card debt free which is for every statistics a very very long time.
How to get out of the crisis:
- Get a debt consolidation loan from the bank or credit union you have a history with, this will enable you to get a lower rate of interest on your debt. Such a loan usually lasts between 5 to 7 years.
- Mortgage Refinance: If you have available equity in the house, try and get your home loan refinance either with the same lender you are with or a competitive lender, this equity will help you pay of that credit card debt and save you on interest charges.
- Say no to credit card limit increments every time it is offered by the bank or credit union.
- Credit Card balance transfer: This is another effective way of reducing the interest rate charges on the credit cards, usually a financial institution offers to transfer the balances of your credit cards to a new credit card with interest charges on the balance at 0% or minimal for a year or less, this will help pay the credit card principal amount quickly.
- Try and pay more than your minimum monthly payment which will enable you to pay off the balance quicker and reduce the interest
- Speak to Debt Negotiators at 1300 351 008 and one of your friendly advisor will be there to help you go through the best options that are available to you. Deal with your debts today as tomorrow might be too late.