Australian's Reducing Their Credit Card Debt At Record Rates
Posted September 18th, 2009
Aussie, Aussie, Aussie, Oi, Oi, Oyi… well, excuse my enthusiasm but you guys deserve a pat on the shoulder for becoming rather credit card savvy by reducing your card balance!
See, according to the Reserve Bank’s latest data us Aussies (yep, that would include me too) are getting rather smug with the ways of debt (note to self, ‘I wonder whether that’s got anything to do with our fabulous website copy?’ *end note.)
Credit card debt paid off at the fastest rate on a 14-year record!
Our average credit card balance in July was $3,100 which relates to being 0.6 per cent lower than the year previous.
Craig James, who is CommSec’s Chief Economist, says it is the fastest decline since records began 14 years ago.
“Household finances are in good shape, people have gained from the fact that taxes have been cut income levels have been rising and interest rates have been falling, but they’re using that extra cash to pay off credit card debt,” he said.
“And if they’re going to make any purchases they tend to use debit cards rather than credit cards.”
Australian banks are also doing rather well despite the global meltdown but still have some way to go to completely mend their balance sheets.
The ratio of their top ranking capital to total assets has climbed to a 13-year high in the June quarter.
But it isn’t all sunshine and whopping joys of laughter either. In fact, bad debts have risen by almost $3.6 billion in the last quarter.
Mr James warns that these debts could continue to rise as more borrowers are pressured by the downturn.
“I think one of the fundamental reasons why the Reserve Bank isn’t lifting rates already is because of concerns about the health of our banking system and lenders more generally, it’s the fact we could get more bad debts coming through,” he said.
Source: ABC
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Comparison of our Top Credit Card Offers
| Interest Rate (p.a.) | Balance Transfer Rate (p.a.) | Annual Fee | Cash Advance Rate (p.a.) | |||
|---|---|---|---|---|---|---|
Bankwest Breeze MasterCard | A low interest rate on everyday purchases with a low balance transfer offer | 0% for 6 months (reverts to 10.99% ) | 4.99% for 9 months | $49 | 21.99% |   |
Citibank Clear Platinum Card | A low interest rate offer on balance transfers and purchases | 11.99% | 0% for 12 months with 3% handling fee | $99 | 21.74% | |
St.George Vertigo | An introductory offer on balance transfer and a low annual fee | 13.24% | 0.99% for 6 months | $55 | 21.49% | |
Virgin Flyer Credit Card | Earn 1 velocity point per $1 spent, plus an introductory offer on balance transfers | 20.99% | 1.9% for 12 months | $50 (for first year thereafter $99) | 20.99% | |
Westpac 55 Day Credit Card | No annul fee for the first year with a low rate on balance transfers and purchases | 0% for 5 months (reverts to 19.59% ) | 3.99% for 6 months | $0 annual fee for the first year ($30 thereafter) | 21.49% | |
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