Nearly two in 10 Australians regularly incur late fees on their credit cards, and it’s a habit that can cost hundreds, new research has revealed.
Analysis performed by comparethemarket.com.au found 18 per cent of Australians regularly incur late fees, and with late fees ranging from $10 to $30, over 12 months of late repayments, that can hit $360.
Money expert at comparethemarket.com.au, Rod Attrill told Yahoo Finance that fees for going over your limit also range from $10 to $40 across ME, ANZ, CommBank, NAB, Citi, Virgin and HSBC. Nearly one in four (24 per cent) admit to regularly going over their credit card limit.
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“It’s concerning the number of people who become so stuck on how they can manage their finances day to day and forget the basics when it comes to maximising savings and improving their credit card use,” Attrill said.
“With Australia’s outstanding debt balance now totalling almost $45 billion, it’s time for everyone to wake up to their financial behaviours and put themselves in the best possible position when dealing with their bank.”
Guilty! What can I do about my bad credit habits?
Review your credit report
If you’re like the 36 per cent of Australians who don’t know what their credit score is, you should order a copy of your report and review it.
You can do this by contacting any of the official credit reporting bodies listed on the official government website.
If there are errors on your report, you should contact the body to have the errors corrected to prevent any long-term damage to your credit score.
Pay your bills on time
Unsurprisingly, this is one of the easiest ways to boost your credit score. If you fail to pay a major bill on time, this could be recorded as a default depending on how late it is, so it’s important to stay on top of your bills.
One way to do this is by setting up automatic payments for things like rent, phone bills and energy.
Keep your savings out of sight
If you can’t see it, you might not think about or use it. That’s why it’s a good idea to put your savings into an account that you can’t touch or easily view.
Pay off your debts
Loans for credit cards and cars will stay in your credit report until you’ve paid them off, so it’s a good idea to chip away at them.
You should prioritise your high interest debts first.
Lay off the credit card
Try reducing the limit on your credit card and also look around to find better value deals.
As comparethemarket.com explains, the lower your credit card balance, the better your credit score is.
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