$45 billion. That’s how much Australians owe on their credit cards.i
Now, perhaps that’s no drama if we’re not paying too much to access credit and we’re managing to avoid interest charges by paying back what we owe on time.
But we paid a collective $1.5 billion in fees in 2016-17.i And we’re taking out new credit cards at an increasing rate. Two in five Australians are juggling more than one credit cardiand 300,000 new credit cards accounts were opened over the five years to 2017, bringing the total number of cards in Australia to a staggering 14 millionii.
So given all this it’s not surprising that almost one in five of us are struggling with credit card debt.iii
If you’ve realised you might have a problem with your credit card debt, it’s time to take back control. Sit down, take a deep breath and work out a step-by-step plan.
Congratulations. You’ve consolidated your debt, set up a direct debit, closed a few cards and set yourself well on the way to pay off any remaining debt.
But how do you make sure you don’t fall into the same credit trap again? It’s all about developing more healthy financial habits.
The good news is that the Government is introducing reforms on 1 January 2019 to help Australians manage their credit card debt.
Once the credit card’s sorted, it could be time to move on to any other debts you might have. Come and speak to us about taking control of your overall debt.
i Australian Securities & Investments Commission, REP 580 Credit card lending in Australia, July 2018, The credit card market in Australia, section 81, pg. 17, https://asic.gov.au/regulatory-resources/find-a-document/reports/rep-580-credit-card-lending-in-australia/
ii Australian Securities & Investments Commission, REP 580 Credit card lending in Australia, July 2018, Snapshot of the market, 2012-17, section 92, pg. 20, https://asic.gov.au/regulatory-resources/find-a-document/reports/rep-580-credit-card-lending-in-australia/
iii Australian Securities & Investments Commission, REP 580 Credit card lending in Australia, July 2018, section 99, pg. 24, https://asic.gov.au/regulatory-resources/find-a-document/reports/rep-580-credit-card-lending-in-australia/
iv National Consumer Credit Protection Amendment (Credit Cards) Regulations 2018, Schedule 1 – Amendments, https://www.legislation.gov.au/Details/F2018L00504/Explanatory%20Statement/Text
© AMP Life Limited.
First published December 2018