Invest
Ouch: that $28.6bn bill could be hard to shift
February is set to be a tough month for those attempting to pay off credit card debt as average $4,000 holiday bills and back-to-school expenses join forces.
Ouch: that $28.6bn bill could be hard to shift
February is set to be a tough month for those attempting to pay off credit card debt as average $4,000 holiday bills and back-to-school expenses join forces.
That’s according to RateCity analysis of Reserve Bank of Australia data which found that the average Aussie credit card holder spent $3,679 in December. Together, that makes a “whopping” $28.6 billion spent by Aussie credit card holders.
That average spend is based on Roy Morgan figures which state there are 7.765 million credit card holders in Australia.
To RateCity money editor Sally Tindall, this holiday splurge means escaping debt in February can be especially hard.
She explained: “Families are not only dealing with debt from the holidays, they’re now racking up more expenses on their cards to pay for essential back-to-school items.
“Most people have between 45 and 55 interest free days, but once they dry up, people get hit with interest rates as high as 24.99 per cent.”
In fact, RateCity’s analysis argued that if those with a $3,679 debt only made minimum repayments, it would take them 24 years and nine months to eliminate the debt. It would also cost an extra $6,849 in interest.
Noting this, Ms Tindall advised: “If you are carrying a large amount of debt, transferring the balance to a card that offers an interest-free period can give you some breathing space.”
According to CommBank data, this back-to-school season is set to be even more financially painful, with laptops and tablets pushing costs up by 43 per cent.
As such, Aussie families are predicted to spend $1.7 billion on supplies, or about $829 per family.
As it stands, Australians owe about $52.2 billion on credit cards and $31.6 billion of that is accruing interest. This means that for the average $6,595 debt, $4,073 is gathering interest.
To the Australian Bankers’ Association, that $52.2 billion figure is good news. The Association argues that the figure represents a $260 million reduction in debt and is “evidence of prudent use of credit cards”.
However, quoting the same figure, the Consumer Action Law Centre said balances have increased by nearly 20 per cent in the last 10 years. They warned that the design of credit cards “encourage long-term indebtedness”, and said increasing balances owed can lead consumers into “harmful debt spirals”.
“It is our experience that many consumers struggle for years at a time to make repayments to their credit accounts without ever reaching the point of default.”
Spending
Buy a pair, give a pair claim costs $3.5m
Eyewear retailer Oscar Wylee has been ordered by the Federal Court to pay $3.5 million in penalties for misleading or deceptive conduct and making or misleading representations about its charitable do...Read more
Spending
Single mums can afford the basics due to pandemic: report
Australian single mothers are no longer skipping meals to feed their children, being forced to wear the poorest clothing or having to steal nappies as changes to social benefits due to the COVID-19 p...Read more
Spending
Why the iron price boom means you pay more for an iPhone
A strong Australian dollar spurred on by the high price of iron ore means Australians are now paying more for an iPhone relative to 12 months ago, new research has shown. ...Read more
Spending
Buy now, troubles later?
Almost one in three people who use buy now, pay later services is finding themselves in financial trouble, new research has found. ...Read more
Spending
Consumers push for locally made products
Australians are increasingly supporting locally produced products as the COVID-19 pandemic revealed weaknesses in the Australian economy as well as an over-reliance on foreign trading partners, accord...Read more
Spending
Petrol prices tumble but record gross margins mean you pay more
The average petrol price in the June quarter fell to its lowest level in 21 years in real inflation-adjusted terms as a result of the recent lockdowns and geopolitical tensions, but gross retail margi...Read more
Spending
Consumers’ intent to spend rises despite COVID restrictions
Australians’ intentions to spend have increased during July, despite lockdowns and border restrictions slowing down consumer spending, new research has shown. ...Read more
Spending
How are Australians spending stimulus money?
Australians have received an unprecedented amount of cash amid further government stimulus, new research has revealed. ...Read more
Spending
Buy a pair, give a pair claim costs $3.5m
Eyewear retailer Oscar Wylee has been ordered by the Federal Court to pay $3.5 million in penalties for misleading or deceptive conduct and making or misleading representations about its charitable do...Read more
Spending
Single mums can afford the basics due to pandemic: report
Australian single mothers are no longer skipping meals to feed their children, being forced to wear the poorest clothing or having to steal nappies as changes to social benefits due to the COVID-19 p...Read more
Spending
Why the iron price boom means you pay more for an iPhone
A strong Australian dollar spurred on by the high price of iron ore means Australians are now paying more for an iPhone relative to 12 months ago, new research has shown. ...Read more
Spending
Buy now, troubles later?
Almost one in three people who use buy now, pay later services is finding themselves in financial trouble, new research has found. ...Read more
Spending
Consumers push for locally made products
Australians are increasingly supporting locally produced products as the COVID-19 pandemic revealed weaknesses in the Australian economy as well as an over-reliance on foreign trading partners, accord...Read more
Spending
Petrol prices tumble but record gross margins mean you pay more
The average petrol price in the June quarter fell to its lowest level in 21 years in real inflation-adjusted terms as a result of the recent lockdowns and geopolitical tensions, but gross retail margi...Read more
Spending
Consumers’ intent to spend rises despite COVID restrictions
Australians’ intentions to spend have increased during July, despite lockdowns and border restrictions slowing down consumer spending, new research has shown. ...Read more
Spending
How are Australians spending stimulus money?
Australians have received an unprecedented amount of cash amid further government stimulus, new research has revealed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
