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.
* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.
^See information about the Mozo Experts Choice Personal Loan Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.