Your Credit Card – Know It Like It’s Your Best Friend

The use of credit cards in Australia is escalating possibly on the back of a good economy breeding confidence although do individuals know the right way to service this debt and how much it may be costing?

Australians owe thirty two dolars billion in credit card debt, according to Reserve Bank figures, and some experts predict this will balloon to almost $50 billion by 2009.

Thats an impressive figure and as it would it appear it is certainly on the rise with Baycorp Advantage, a credit info provider, saying that credit card applications were up 11 per cent on year that is last with 875,000 applications for credit cards in October, November and December.

This is the concern, only seven years ago, the costs incurred on cards was $136 million but they have now soared to an impressive $787 million. This is partly as a result of an increase in the charge for late payment from $20 to twenty nine dolars.

Analysts it will take 5 years of minimum repayments to pay off the $2399 shown by the Reserve Bank to be the average credit card debt in December. The average credit limit rose to $6754.

This most likely doesn’t apply to Australia on your own as the trends in some other countries are extremely similar.

From these figures it might be seen that there is a lack of knowledge on easy methods to use credit safely and effectively and in addition possibly a lack of study into the terms and fees related to the particular card being used. Some say this can be thanks to the heavy marketing around bonus point systems shifting the customers decision making from’ terms and conditions’ to’ what do I get for nothing’.

Consumer groups have renewed calls for reform of the Uniform Credit Code to stop banks promoting unsolicited limit increases, and requiring them to print warnings of just how long it is going to take to settle the debt of theirs at current interest rates.

Credit cards aren’t all bad though. Credit cards are convenient and safer to carry than cash. You are able to also earn rewards or even get cash back on your purchases. They may also help build your credit rating. sensible and Disciplined use are important as well as a very good knowledge of just how your charges are applied by particular card and deciding on the best credit card for you in the very first instance.

The key issues must be considered when applying for and using a credit card. Asking questions of yourself is possibly the very first step. For example’ Do I want a credit card’ and’ Will the payments fit into my budget’.

Choosing the right card should involve at least reviewing :

The interest rate – Some cards offer a stylish honeymoon rate although it’s the rate after this that’s essential.

The interest free period – this could differ from card to card.

How is the interest calculated – from the time of time or purchase of statement?

The annual fee – some time bonus systems are offset by this yearly fee.

Administration fees – are there any and what are they?

Late payment & over the limit fees – when does it apply and how much?

precision castparts federal credit union – what other charges are there?

Cash advance – in case you are going to use review the conditions carefully and be cognizant of the way it works and what charges apply.

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