The memories of Christmas might be fading but many Aussies will still be paying off credit card debt six months after the festive season.
Roy Morgan research for the Salvation Army shows 1.8 million people will take two to three months to pay off their Christmas credit card debt with a further 476,000 people taking six months or more.
Many Australians under financial stress often turn to pay day loans and consumer leases, says Kristen Hartnett, financial counsellor with Moneycare, the charity’s free financial counselling service.
“Increasing the levels of debt, particularly this risky form of lending will only exasperate the problem”, she says.
“We encourage people to see a financial counsellor first if they are experiencing financial stress.
“Financial counsellors can advocate on your behalf and negotiate a payment plan with the people you owe money too. Additionally, No Interest Loans Schemes (NILS) provide safe and affordable credit to people for essential items.”
Credit card debt weighing you down?
- Contact the credit provider, ask for the hardship department and organise a repayment plan.
- Arrange to have the credit card bill payments made automatically from your bank account on pay day.
- Consider a 0% balance transfer offer to minimise interest payments and pay your debt down faster.
Feel overwhelmed when the bills come in?
- Ring your provider, check that you are on the best deal/plan.
- Ask your electricity provider how much your electricity costs on a weekly or fortnightly basis and have this amount transferred from your bank account to your utility provider each pay day.
- Check out all your options before borrowing more money.
Want to start a savings habit?
- Have $10 or 10% of your income transferred to a savings account every pay day.
- To do this manually, put a reminder in your phone or diary reminding you to make the transfers.
To talk to someone about getting on top of your finances, call 1800 007 007 to speak to a financial counsellor.