Are You Using Your Credit Card ?

The latest figures from the Reserve bank of Australia indicate total credit card balances have risen 42 per cent during the past five years, now standing at $49.3 billion and with $36 billion of accruing interest.These are new high records perhaps suggesting rising bills are putting pressure on households with the number of credit card accounts in the region of 15 million for the first time. This is growth of 18% over the past five years and reflects a debt balance for each card of $3321. How many do you have? There is also research showing money owning to utility companies,  including gas and electricity is growing and has increased by 30 per cent during the past three years.

Compounding the situation is the RBA’s interest rate hikes since 2009 of 1.75 per cent, although from a low base. A trend may be developing where users consolidate their credit card debt with  a lower interest loan using as a residential mortgage top up facility. But this method increases a short term debt in to long term with interest rates thought to be in an upward direction and also considering rate rises have added almost $300 a month to repayments on a $300,000 mortgage during the last couple of years.  Using a personal tax manager to find all you legitimate tax  PAYE and personal tax deductions is likely to help the situation.