Aussies 'are struggling to handle credit card debt'

Mozo

Wednesday 11 July 2012

Aussies are finding it increasingly difficult to pay off their credit card bills, a new report has suggested.

Recent government figures indicated that Australia has a collective credit card debt in the region of $36 billion, although some economists believe this is a conservative estimate.

According to the Nielsen Global Survey of Investment Attitudes, one in four Australians pay less than or the minimum amount required to settle their credit arrears each month.

The research found that cards are being used more frequently because of the rising popularity of online retailing. On a global scale, 52 per cent of internet shoppers own a credit card, while 43 per cent use debit cards.

It seems that Aussies are becoming less likely to carry cash around, with 67 per cent saying they prefer to have plastic products in their wallets and purses.

Unfortunately, only 63 per cent of the population pay their bills in full each month and because of high interest rates, a lot of people are falling into debt.

Chris Percy – managing director at Nielsen Pacific – believes that Aussies need to be a bit more responsible when using credit facilities.

"It is widely acknowledged that Australians have a large amount of credit card debt; however, we urge consumers to re-evaluate their consumption habits to ensure they are financially secure," he remarked.

The government has been keen to overhaul the credit card industry and has introduced a number of reforms in the hope that people will be less likely to spiral into financial trouble.

Merchants have been banned from issuing excessive surcharges on card transactions and credit providers can no longer bombard potential customers with deals.

"Following the recent introduction of new laws around credit cards, organisations need to be wary of not encouraging consumers to over-commit financially and at a level whereby they will struggle to repay accrued debts," Mr Percy added.

One way to ensure you do not live beyond your means is to use debit cards, as this ensures you are only spending money that is already in your bank account.

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Aussies 'are struggling to handle credit card debt'

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