Compare credit cards to reduce debt, expert says

Tuesday 12 January 2010

Article by Mozo

Expensive debt from the Christmas and New Year splurge should prompt Aussies to compare credit cards, an expert has said.

Brontie Chambers, manager of products and member value at Community CPS Australia, told News Limited that an effective means of repaying credit card debt is to transfer the balance to a low interest-rate card.

"You can be paying 18 or 19 per cent on an ordinary credit card but there’s a lot of low interest rates out there to transfer to some as low as three or four per cent," she told the newspaper.

However, Ms Chambers warned that in switching to low interest cards, bank customers should not be tempted to accept a higher card limit that will encourage them to spend at a higher rate.

She added that if a low balance transfer was not available, personal loans or debt consolidation might be the answer.

Last week a report by the Daily Telegraph suggested that personal debt may increase this year as households face paying up to $76 a week extra in rising living costs.

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