Although credit card interest rates are generally higher, a credit card debt can be short term and doesn’t necessarily mean interest charges1 - if you pay the balance you owe off in full each month. However some of us don’t use them like that. Here are some good reasons to rethink how you use them – or whether you use them at all.
Credit card interest is costing Australians a lot of money.
$31,627,035,870 billion - We use credit a lot. Australia has a national credit card debt accruing interest of 31 billion.1
$29 billion - Aussies borrowed a collective $29 billion on credit cards over Christmas alone in 2017.1
55 days interest-free - On an average 55-day interest-free period, December 2017 cost Aussies $230 million in interest.2
Many of us are not as good at managing credit card debt as we think we are.
19% of card holders take longer than three months to service their debt. 5% of this group takes a year or more!2
One-third of Australians pay interest without realising it but the real figure is about double that.3
70.19% of Aussies have a credit card. 20.69% of adults 35-54 have 3 or more!4
Reward programs are not always rewarding for all of us.
Decreases in credit cards rewards value in the last 12 months in Australia are at around 63%.5
After fees, reward programs deliver little or nothing unless you spend well over $5,000 on your card monthly.5
Cards with reward programs are enticing, but often come with higher fees and above average interest rates.5
Disclaimer: Original content source: Pepper Money. It is designed for publication through Accredited Brokers, to provide you with factual information only, and it is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Pepper nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call us on 0412 110 118.
1.http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4102.0main+features402014#credit
2.https://www.finder.com.au/australians-have-racked-up-29-billion-in-christmas-credit-card-debt
3.http://www.abc.net.au/news/2015-12-16/credit-card-debt-australia/6928326
4.https://www.finder.com.au/credit-cards/credit-card-statistics
5.http://www.smh.com.au/money/borrowing/credit-card-reward-value-falls-63-per-cent-over-past-year-20170831-gy7zun.html