Aussies 'look to repay credit cards using stimulus cash'

Tuesday 14 April 2009

Article by Mozo

Significant numbers of Aussies will use the cash received from the stimulus package to tackle their credit card debts.

In research commissioned by St George, just over a third (35 per cent) of people are planning to use the government handout to repay credit cards and personal debt.

However, those looking to do more to get their finances back on track may also want to compare credit cards for a competitive deal, Australian Associated Press reports.

And around one in ten (nine per cent) may be taking advantage of recent interest cuts by the Reserve Bank as they plan to put such cash towards mortgage repayments.

Overall, just $2.6 billion of the total $7.7 billion handout is set to be spent.

"There is no doubt the current economic climate is causing many people to act cautiously with all financial transactions and some are choosing to take a more conservative approach to this one-off cash payment," Andrew Moore, spokesperson for St George, points out.

Last month, Louise Biti, director of financial planning consultants Strategy Steps, claimed that using stimulus money to make additional credit card repayments could help reduce the total length of payments on a card by several years, potentially saving borrowers thousands of dollars in fees and interest.

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