Australians Lead The World With Personal Debt
Recent numbers have come out that are showing that Australians have more personal debt than any other citizens of any other country in the world. They even have more than the United States of America. The US is usually the first country one would think of when the words “largest credit card debt” is mentioned. The Reserve Bank of Australia or the RBA has determined that most of the debt Australians carry is for mortgages, loans and credit cards. These debts are over $1 trillion AUD. This equals to $56,000 US dollars for every Australian adult. The average American adult has about $45,000 US dollars worth of debt.
The most surprising part of the report is not that Australians carry more debt than anyone. The surprising part is exactly how much debt they have.
Many Australians have begun to live beyond their means. This can be a result of legislation that was designed to help people who are trying to buy homes for the first time.
Not many countries can boast about low interest rates, but Australians have had the pleasure of having low rates for a long time. Financial assistance from different agencies has not helped the situation. If interest rates begin to rise to the point where homeowners can not make payments on loans, Australians will be in a similar situation that Americans have been in for the last 3 years.
The Difference Between Good Debt and Bad Debt
It is important that consumers understand the difference between bad and good credit. A bad debt is a debt for things that you can not afford or for things you do not need. These debts can also be considered luxuries and can include anything from televisions to expensive clothing. It is important for consumers to only create loans for things when they can make the payments with no problems.
A good debt is a debt that can be used to help your future in a positive way. Most investments are considered good debts. A loan with low interest rates is a good investment when it is used to purchase property.
There are ways Australians can keep their debt down and keep from getting more debt. Credit card debt can be a huge burden to bear. If you have only one credit card, it is best to pay more than the minimum every month. This will help pay off the debt faster. If you more than one card, choose the one with the lowest interest rate to pay off first.
Once you have your cards paid off, or you are able to make the payments without being stressed, it is important to not repeat the behaviors that caused you to have a large credit card debt in the beginning. Do not go on shopping sprees where your spending is not controlled. You can also use a debit card or pay in cash for purchases. This will help you see exactly how much you are spending and once you run out of cash, do not turn to the credit cards.
Personal debt is a problem we all share. It is important to get it under control as quickly as possible.Back to top