Although credit card interest rates are generally higher, a credit card debt can be short term and doesn't necessarily mean interest charges1 - if you pay the balance you owe in full each month.
However some of us don't use them like that. Here are some good reasons to rethink how you use them - or whether you use them at all.
View the accessible text version of the infographic below or download the PDF version.
Credit card interest is costing Australians a lot of money.
- We use credit a lot. Australia has a national credit card debt accruing interest of $31,627,035,870. That's 31 billion.1
- Aussies borrowed a collective $29 billion on credit cards over Christmas alone in 2017.1
- On an average 55-day interest-free period, December 2017 cost Aussies $230 million in interest.2
Many of us are not as good at managing credit card debt as we think we are.
- 19% of card holders take longer than three months to service their debt, which means their interest costs likely to pile up. 5% of this group takes a year or more!2
- One-third of Australians pay interest without realising it but the real figure is actually about double that.3
- 70.19% of Aussies have a credit card. 20.69% of adults 35-54 have 3 or more!4
Reward programs are not always rewarding for all of us.
- Decreases in credit cards rewards value in the last 12 months in Australia are at around 63%.5
- After fees, reward programs deliver little or nothing unless you spend well over $5,000 on your card monthly.5
- Cards with reward programs are enticing, but often come with higher fees and above average interest rates.5
If you're good at managing your money, and can easily pay the balance off each month - then a credit card can really work for you. But if you struggle to manage multiple credit card debts, a personal loan for debt consolidation loan may be an option. Learn the pros and cons of consolidating your debts here.
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This article provides you with factual information only, and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. Neither Pepper nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in this article. For information about whether a Pepper loan may be suitable for you, call Pepper on 13 73 77 or speak to an accredited Pepper Money broker.