'Feel no guilt' about wiping out credit card debts

No-one should feel guilty about putting money into savings accounts and paying off credit card debts, financial expert Ross Gittins reassures.

Writing for the Brisbane Times, he notes that in times of economic woe, it’s only natural to hunker down and pay off debts or put more into home loan repayments.

"When recessions loom, people always worry about losing their job and so defer major purchases and cut their discretionary spending," he comments, adding that whether people are paying off their credit cards or trying to make use of high-interest savings accounts, they are simply preparing themselves for rough weather.

However, he concedes that while this is a common reaction in every recession, Aussies may be trying even harder to pay off credit cards and home loans this time around as consumers are more in debt than ever.

Official figures showed that the amount of money used to pay off credit cards soared in December as residents took stock of the weak economic conditions.ADNFCR-1761-ID-19071633-ADNFCR