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Debt, Wealth Creation

2 million Australians have exceeded their credit card limit

 September 30, 2020

By  Chase Edwards

Job loss and reduced hours due to COVID-19 has caused over 2 million Australians to exceed their credit card limit since the start of the pandemic. Most people who have exceeded their limit are likely to owe more than $10,000.00 on their credit card.

Australians are relying on credit cards to pay for essentials such as rent and food.

Although the Reserve Bank of Australia’s interest rates are at a record low of 0.25%, the big banks are still charging double-digit interest rates on credit cards. These double-digit interest rates are on credit cards marketed as low interest rate products.

Below are some tips for dealing with credit card debt:

  • Make more regular payments;
  • Have a hard limit imposed so that you can’t exceed your limit;
  • Look for credit cards that offer interest free periods, lower rates and lower fees or contact your current provider and request same;
  • Consolidate debt;
  • Create a monthly budget.

Another great option is changing to a credit card with fixed monthly payments, instead of interest charges and late fees. The National Australian Bank and The Commonwealth Bank have this month launched credit cards with this option.

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