Millennials top list for bad credit card habits
The millennial generation may want to give up paying for their avocado on toast with plastic, after new research by peer-to-peer lender, SocietyOne, found that they’re the worst offenders when it comes to credit card mismanagement.
According to the nationwide survey, nearly two in three millennial credit cardholders mismanage their card, with almost half (48%) admitting that they don’t pay off their credit card balance each month. Eleven percent of millennials even admitted to buyer’s remorse after paying for their nuptials with the credit card.
Across all age groups, the top most regretful purchases were major household items at 26% followed by renovations at 8%. The most disturbing finding was that 6% of Aussies have whipped out their credit cards for mortgage bills and rent at some stage in their lives.
“A credit card might seem like the quick and easy option when it comes to paying for a wedding venue, or to get you through to the next rent cycle, but millennials need to be careful – it’s a steep and vicious cycle,” said the Chief Operating Officer of SocietyOne, Greg Symons.
“They should be minimising credit use wherever possible and assessing their budget to make sure they are living within their means.”
Symons also reminded credit card users that they had other options when it came to financing their lifestyle such as low rate personal loans.
New figures released by credit reporting provider Equifax have shown that Aussies are indeed turning to personal loans more than credit cards when it comes to big ticket purchases, as loan applications grew by 13.5% this March quarter compared to the same time last year.
“While credit cards are being used more for everyday transactions, it is likely consumers are funding a greater number of higher value household purchases through personal loans,” explained Angus Luffman, Senior GM Consumers Products at Equifax.
According to the Mozo database Community First Credit Union offers the lowest rate attached to a secured personal loan at only 5.34% (6.11% comparison rate), while in the world of credit cards the most competitive interest rate sits a little higher at 6.99% from Police Credit Union (but the catch is that there are no interest free days).
If you’re in the market for a personal loan, shop around here at Mozo, with 186 products to compare side-by-side on our database.