Credit cards bridging financial gaps for millions of Aussies

Credit cards bridging financial gaps for millions of Aussies

Millions of Australians are turning to credit cards to bridge money gaps during the cost of living crisis, new research has found.

Comparison website Finder said that 44 per cent of credit card holders had made unplanned purchases on their card in the past 12 months – equivalent to 4.6 million Australians.

Seven per cent of people had been forced to turn to credit cards after running out of money before payday, while 21 per cent had been caught out by emergency expenses.

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And 14 per cent admitted to getting swept up in major sales events such as Black Friday, and spending more than they could afford.

“Stubborn inflation and aggressive interest rate hikes have weighed heavily on finances,” Finder credit card expert Amy Bradney-George said.

“Savings are being depleted, leaving credit cards as many people’s only option to get by.”

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Women (12 per cent) are four times as likely as men (three per cent) to turn to plastic because they’ve run out of money before payday.

Millennials are most likely to revert to their credit card in an emergency with a quarter (25 per cent) saying they’ve done this in the past 12 months.

Bradney-George urged Aussies to rein in spending and avoid discretionary purchases if they are concerned about meeting their financial obligations.

“Many of us may be nursing a Christmas debt hangover so it pays to be extra cautious when using your credit card at this time of year,” she said.

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“If you have credit card debt you’re paying interest on, you could consider transferring it to a card that offers an introductory zero per cent interest rate on balance transfers.

“This gives you a period of time when you can repay what you’ve spent without the added cost of interest.

“Just make sure you have a plan for repayments to avoid higher interest charges at the end of the introductory period.”

She urged people having trouble with repayments to contact their lender to discuss options, or to contact the National Debt Hotline on 1800 007 007 for free financial counselling.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

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