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ISCOVER
Staff Reporter
Despite the fact that almost a quarter of Australians are considered “financially fit”, total credit card debt continues to mount.
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According to data from RateCity, total credit card debt is currently just over $50 billion and has hovered around this amount for the past two years.
While this is an improvement on the past 30 years where total credit card debt increased by up to 28 per cent year-on-year, balances are still growing, which indicates many card holders are likely to be making minimum repayments rather than paying down their debts.
RateCity’s Michelle Hutchison said credit card debt is still a serious issue for many card holders across Australia.
“While it’s great to see consumers are more cautious about using credit cards, there are too many card holders sitting on big debts and not prioritising to pay them down,” she said.
“A RateCity survey in December showed 11 per cent of respondents were making minimum repayments to pay off their debts – that’s potentially 1.7 million credit cards.
“In fact, by making the minimum monthly repayment of 2 per cent on average, the average credit card balance of $3,282 would take 24 years and five months to pay off, based on the average purchase rate of 17.21 per cent, according to RateCity. At this rate, you could be still paying off your credit card debt after you finish repaying your mortgage.”
“The total interest charged would cost more than double the original balance.”
