Australians accumulated an eye-watering $27.5 billion in credit card debt over the 2015 Christmas period. Reserve Bank data shows that $3.2 billion of that total sum helped fund Christmas present purchases. Higher-than-usual grocery bills, Christmas holidays, and other seasonal costs have also seen the average Australian’s credit card bill top $1,668 at the end of December.
Creditcardfinder, analysing figures from the Reserve Bank of Australia, reported that a third of people who relied on plastic during the festive season won’t pay back their debt before the end of the interest-free period. Instead, spenders are expected to take an average of five months to repay their festive debts. Failure to pay early is expected to add $286 million in interest to the nation’s Christmas credit bill.
“It certainly was a case of spend first, worry later for a lot of people who are now facing the reality of a Christmas debt hangover,” Bessie Hassan, the consumer advocate for Creditcardfinder told Australian Associated Press.
While credit cards with interest-free balance transfer deals can seem attractive to over-zealous Christmas shoppers, Ms Hassan says these should be used with caution.
“Credit cards can revert to much higher rates if you don’t pay off the transferred debt during the transfer period,” she explained.
If you’re feeling daunted by your current credit card balance, call Chase Edwards on 1300 854 833. Our debt minimisation experts can teach you strategies for clearing your credit card debt and building your wealth so you don’t have the same financial headache next festive season.