Australia is a nation of credit card lovers. We adore the convenience of contactless payments and watching our rewards balance rise, but there’s a much darker side to our credit card love affair, according to new research from Mozo.
The financial comparison website found the nation’s credit card balance has grown to $52.5 billion. Roughly two-thirds of this amount is accruing interest. With Australian credit cards charging an average interest rate of 17.28 percent, our debt is growing at a rapid rate.
The average Australian credit card user has a balance of $4400. Unless they clear their cards in full, they’re typically stung by $63 in interest every month. That’s $756 every year in dead money, according to Mozo spokeswoman Kirsty Lamont.
“Paying interest is like throwing money down the drain,” she told news.com.au. “You really don’t want to be paying interest if you can help it.’’
The good news is, you don’t have to. Paying your credit card down to zero every month is an excellent way to avoid interest charges. With most cards, you’ve got a little longer than a month to dodge the charges though. Seven cards have an extra-long interest-free period of 62 days, so they’re ideal for people that need a little more time to repay their debts.
You could also consider transferring your credit card debt to another card offering an interest-free period. These honeymoon periods can last as long as 24 months, giving you plenty of time to get your finances in order. Just be careful to repay the debt before this deadline though, as interest rates are often inflated after the introductory period.
You could also consider seeking professional advice from an experienced financial firm like Chase Edwards. Our debt reduction experts can offer an honest appraisal of your financial situation and put personalised strategies in place to help you pay off your credit card debt faster. Call us on 1300 854 833 to learn how you could be debt free much sooner than you think.