Single Aussies on a budget advised to get low-balance credit card

Wednesday 24 August 2011

Article by Mozo

Young, single people who are considering getting a credit card have been urged to consider opting for one with a low balance.

Speaking to National Features, finance author and financial planner Justine Davies stated that it is important that Generation Y Aussies be realistic about what they can afford.

She suggested forming a budget to establish what money is available and how much can be spent paying back any debts or mortgages.

"Keep a low credit card balance, limit personal loans and, if you're looking at a mortgage, be realistic about how much you can afford," Ms Davies stated.

Those concerned that they will not be able to resist overspending on their plastic if they have a large margin for borrowing may want to compare credit cards to find one with a low limit.

Michael Daniels, from mortgage broking group Smartline, recently told the Mosman Daily that even with no money borrowed on it, a credit card with a large limit is still viewed as a greater potential financial liability to mortgage lenders than a card with a smaller one.

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