Australia’s credit card debt has stayed constant over the course of the last year as consumers turn their attention away from high interest debt and towards spending their own cash. Up until a little while ago credit card debt was growing at a rate of 20% a year. A few years ago someone with a $5,000 credit card bill could expect to heap on an additional $1,000 by the end of the first year but with today’s market trends that balance would only be picking up $6 now.
The change has come as Australians try to put a lid on exorbitant spending and have started choosing debit cards as their card of preference. With the national credit card debt sitting at around $37-billion the average person has a balance of $3,300 per card, but many people have more than one that they’re using.
For people who are struggling under the weight of credit card debt, there are no shortcuts. The only way to break even, analysts tell us, is to make extra payments and to live within your monthly budget. Because budgets and disposable income are so limited many people are tempted to keep increasing the balance instead of paying it off. For people who just can’t part with their plastic the other alternative is to turn to personal loans – but make sure to shop around and run a comparison at http://www.bankwest.com.au/personal/personal-loans/personal-loans-overview before making any definitive arrangements. This arrangement is ideal, because you’re guaranteed of paying your balance off within just three to five years and, unlike using a credit card, you’re not going to be extending the principal amount and you won’t be able to revolve it.
For millions of people not having the finances to cover the scope of their expenses is a daily reality, especially given the high cost of living down under. Because many people are sitting with bad credit scores, increasing numbers are starting to rely on payday loans. One of the industry’s biggest providers, Payday-loans-Australia has released a report in defence of the services provided by “bad credit loans” because it believes the media has cast a shadow of negativity over the level of services it provides.
Payday loans have recently come under public fire because the interest rates they charge to borrowers are extremely high and in many cases unaffordable anyway. Despite its public lashing, the company says that it provides a valuable service to the public and makes funds available to people who otherwise would not be able to fund unavoidable expenses. The company claims that its service prevents people from falling into a cycle of debt, whereas research shows that if people can’t afford a loan, they really can’t afford it and financial institutions are in the best position to determine whether consumers’ budgets have the latitude to cope with the additional expenses of borrowing more money.
With the rising costs of living and unexpected expenses cropping up on limited salaries many Australians are in the position where they can’t afford their standard of living. Perhaps what may have caused the problem in the first place, is many of them don’t have the discretion or financial savvy to make the most economically mature decision when it comes to purchasing and management of personal loans.
Payday-loans-Australia has come out as saying that, although there is an element of unscrupulous activity in the indust
With so much focus on low interest rates for borrowers there has been less attention given to the concept of cutting back on luxuries and avoidable expenses, an area the public would do well to learn from.ry, as with any industry, people shouldn’t be quick to put the whole sector into that category. The company defended its core business offering by stating that it provided funds that people would not be able to access under different circumstances.
© 2012, Bruce Mc. All rights reserved.