Yahoo Finance 8 credit card sins that 7 million Aussies are guilty of
There are nearly 14 million credit cards in Australia – but that doesn’t mean we’re any good at using them.
New survey data from Finder.com.au has revealed more than half of Aussie credit card holders (51 per cent), or an estimated 7 million people, have made credit card mistakes in the last 12 months.
Twenty per cent of people are guilty of late payments, while 18 per cent admit to impulse buying.
Men are more likely than women to miss the deadline on paying their credit card bills, with 24 per cent of men guilty of this versus 15 per cent of women.
Some Aussies aren’t checking credit card statements (17 per cent) and maxing out credit cards (10 per cent) is also a top ‘financial faux pas’.
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Meanwhile, 10 per cent pay only the minimum repayment amount, 8 per cent withdraw cash regularly from their credit cards, and 7 per cent pay fees for more than one card.
Five per cent of Aussies also apply for credit cards they don’t need.
While these figures don’t sound very high, the interest being accrued from this national debt is at an eye-watering $20.9 billion sum.
“Better card management can literally save you thousands of dollars in interest and charges,” said Finder personal finance specialist Taylor Blackburn.
Bad credit card habits can also cause damage to your credit score, which may hinder your future chances of getting a loan, he said.
“While some lousy actions might only hurt you temporarily, others should be avoided at all costs.”
What can I do?
If your credit card debt is mounting too high, there are some straightforward steps you can take.
For those with multiple credit cards, tackle the debt on the card with the highest interest rate first. “Make sure you are still paying the minimum on any and all cards to protect your credit score and keep you from being charged additional fees,” said Blackburn.
Then take it a step further, and try to get your interest rate down to zero.
“A 0 per cent balance transfer card can help to simplify your finances and consolidate your debts at lower or no interest.”
Some credit cards on the market are offering a 0 per cent interest rate for up to 2.5 years.
Finder also recommends taking a break from your credit card altogether, if possible, to help minimise your debt.
And more broadly, keep on top of your budget, so you know exactly how much you can actually afford to spend.
To protect your credit score, set up an emergency fund to avoid maxing out your credit card in the face of an unexpected expense.
And if you’re no good at paying your bills on time, set up a phone alert so you don’t cop penalties for missed payments.
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