Credit card balances grow as rates keep rising
A growing number of Australians are accumulating debt on their credit cards as rates continue to rise, a commentator has observed.
Sydney Morning Herald finance columnist John Kavanagh noted that many credit card issuers have been moving their interest rates up in "significantly steep steps" this year, suggesting Aussie shoppers should compare credit cards in search of better deals.
This comes after Reserve Bank figures showed that the credit card ’’revolve rate’’ – the rate of cards that carry a credit balance from month to month – is now at 72.5 per cent.
"One of the myths of the credit card market is that only a minority of cardholders carry a balance on their cards from one month to the next. In fact the opposite is true," commented Mr Kavanagh.
He advised people to be proactive in managing their debt, noting that a consumer who only pays the minimum monthly repayment on their credit card could take almost six years to pay off the balance.
The comments come as the Australian Securities and Investments Commission today (July 1st) assumed regulatory control over all consumer lending including credit cards, store cards and mortgages.
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