Most Aussies unaware of credit card costs

The majority of Australian consumers do not know how much they are paying in credit card interest each month, it has been claimed.

MyBudget director Tammy May told News Limited that "more than 90 per cent of people would not know what interest rate they’re paying" – suggesting it is vital they compare credit cards and secure cheaper alternatives.

The comments come after new Reserve Bank of Australia (RBA) data revealed that cash advances on credit and charge cards reached $1.04 billion in March – only the second time since late 2008 that cash advances have exceeded $1 billion.

Ms May told News Limited that cash advances on credit cards are particularly dangerous as they suggest the card holder has no cash in the bank.

"Cash advances on credit cards have an interest rate about two per cent greater than credit card purchases, and they are exempt from the usual 55-day interest-free period charged on purchases," observed the news provider.

Meanwhile, research by the RBA has also revealed that Australians collectively owe more than $47 billion on credit cards, almost $35 billion of which is accruing interest.

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