Almost two millions Australians are dedicating a massive portion of their income to repaying credit card debt as cost of living pressures forces many to look for short term relief where they can.<\/p>\n
Fresh research from Finder, shared exclusively with SkyNews.com.au, showed that more than one in three Aussies with a credit card allocate at least 20 per cent of their income to repayments.<\/p>\n
This equates to more than 1.9 million Aussies who are putting a huge chunk of their income towards debt repayments.<\/p>\n
Finder\u2019s research also showed that almost half of all credit card holders had debt that was accruing interest.<\/p>\n
Sarah Megginson, personal finance expert at Finder, said the research showed a massive number of Aussies live paycheque to paycheque.<\/p>\n
\u201cBeing stuck in credit card quicksand creates a cycle where you\u2019re constantly paying for the past and that can quickly get out of hand,\u201d Ms Megginson said.<\/p>\n
\u201cIf you\u2019re dedicating a big slice of your pay to credit card repayments, that\u2019s also money you\u2019re not using to build savings, invest or get ahead financially.\u201d<\/p>\n
The research found that almost one in ten of those with credit cards are spending between 31 and 40 per cent of their earnings towards repayments.<\/p>\n
Another seven per cent said they were spending more than 40 per cent on the repayments.<\/p>\n
Ms Megginson said credit card debt can continue to spiral for those who struggle to pay it off.<\/p>\n
\u201cThe longer it takes to pay off your card, the more you pay in interest charges \u2013 and that can set you back years when it comes to reaching your financial goals,\u201d she said.<\/p>\n
\u201cInterest rates on credit cards are often above 20 per cent so you ideally want to pay the full outstanding balance each month to avoid interest charges.<\/p>\n
\u201cBut when a large chunk of your income is going to pay off debt, there\u2019s little left to cover rising living costs, and it can feel like you\u2019re working hard just to stay afloat.<\/p>\n
\u201cMany Australians don\u2019t realise that switching to a low-rate or balance transfer card could save them literally thousands of dollars and speed up the path out of debt.\u201d<\/p>\n
Many Aussies have turned to credit card debt as cost of living pressures have forced households to tighten budgets.<\/p>\n
Total credit card debt in Australia is more than $42b while the average debt average is $3500, according to Money.com.au.<\/p>\n
Post-pandemic inflation, which has risen more than 18 per cent between September 2021 and the middle of this year, has meant credit cards became a more attractive option for those seeking short term relief.<\/p>\n","protected":false},"excerpt":{"rendered":"Almost two millions Australians are dedicating a massive portion of their income to repaying credit card debt as…\n","protected":false},"author":2,"featured_media":198955,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,2610,17971,12867,164,18154,124606],"class_list":["post-198954","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-cost-of-living","tag-credit-card","tag-credit-card-debt","tag-economy","tag-finder","tag-price-pressures"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/198954","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=198954"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/198954\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/198955"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=198954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=198954"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=198954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}