RBA Statistics: Credit Card Balances Rise, Repayments Climb Even Further

The Reserve Bank of Australia has reported that as of March 2010, credit card purchases as well as balances have increased in Australia.

It seems that a near seven percent rise in credit card average balances increased in one year.  This means that Aussies are spending more money on credit card purchases, and interest, and balances are increasing.

Surcharges:

This rise includes cash advances and surcharges. Surcharges are nasty little transaction fees that merchants charge for transactions, which ultimately should be their responsibility because it is a fee the credit card companies charges them, however they pass these on to consumers.  Some merchants in this surcharge robbery are charging consumers up to ten percent of the purchase, taking total advantage of uninformed consumers, which is dinging our balances in a big way.

Not all merchants charge this fee, however, and some assess different rates, but it is high time the merchants start disclosing, or consumers start questioning them.  

Interest:

Interest also plays a big factor in these rising balances.  Just when you feel you are getting caught up, paying your monthly minimum balance every month, on time, your balance never seems to decrease.  It’s time to check your credit card balance and interest rate and consider a ‘balance transfer’ to a zero percent credit card.

Surprisingly, the total balance of credit cards rose to almost fifty billion dollars in March 2010 – which is partly attributed to the rise in credit card accounts.  In March alone, the credit card new accounts opened rose by almost two percent.

This high debt does not directly reflect an increase in credit card debt; the repayments of debt also increased by nearly twenty billion, according to the Reserve Bank of Australia. In fact, Australian’s have repaid more than spent in 2010, showing a greater reliance on credit, yet taking a responsible stance on repayments. This could be due to the economic situation.

Economy:

Although Australia appears to be coming out of the economic crisis, and has not experienced the windfall of the U.S., there are still some job issues that have not recovered.  Many people are still losing wages as in hours cut, and wage rates cut to try to keep employment up, but save companies from going under.

It does appear though, that the worst of the financial crisis is coming to a close, but not by a long shot is it completely over.  So, keeping credit card debt at a minimum, in case you do experience a job loss, cut in wages or hours would benefit you greatly in staying afloat in this still shaky economy.

Something that we should all be doing is continually monitoring our credit card bills, and checking them in between statements, online.  Calling a credit card company can be frustrating, however, it is more frustrating to see ‘unauthorized’ charges appearing on your statement, and getting them reversed can be torture.  Staying on top of your card statements and charges can eliminate further suspicious charges when the statement does come.

Balance Transfers:

Although Australians are making an increased effort to repay their balances as verified by the increased percentage of repayments, too few are taking advantage of balance transfers.

Balance transfers can save you money in interest, especially if you find a transfer company offering zero percent interest.  When you make those monthly payments, they will be going directly to your balance, bringing down your debt, in a major way.

To find out more about zero interest balance transfers, see our balance transfer guide on the balance transfer credit card comparison page.

Credit Consolidation:

Another option, if you have high credit card debt, and have lost your job, or cannot afford the monthly minimum payment, is a credit consolidation company, such as Fox Symes.  Companies such as this will talk to the credit card companies and make arrangements for you, in an effort to lower the payments to an amount you can afford, as evidenced by your net income.

Whichever route you take, keep in mind that credit card companies are in the business of making money, and if you look away or don’t pay close attention, they are getting more of yours than they should.  So, stay alert, if you do have credit cards, watch the merchants where you make purchases, and keep those balances below the credit limit to avoid even further debt.

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