Australian credit card holders have an average debt of $3,217.65 and with five days left until the end of the financial year, consumers are being urged to take action now and get credit card finances under control.
“Credit card debt in Australia has decreased from $50.6 billion to $49.3 billion in the past twelve months,” says Jeremy Cabral, Publisher of CreditCardFinder.com.au.
“This may be attributed to the credit card reforms introduced last July dealing with credit card holders receiving more detail on their statements surrounding ways to reduce their debt. The recent interest rate cuts may also be a contributing factor.
“Regardless of the causes, it is clear that consumers are starting to take control of their credit card debt which is great. By taking action now ahead of June 30th Aussies can get themselves on the right financial path for the next 12 months,” Mr Cabral says.
He has following tips for credit card holders to implement in the new financial year:
1. Use your tax return to pay off your debt
According to the ATO the average tax return in 2012 was $2,552.46. Take this opportunity to pay off high interest debt with your tax return and save whatever you have left over into a high interest savings account or a term deposit.
2. Organise your tax deductions with a credit card
If you are disciplined with your spending, having a credit card designated to pay for only deductible expenses makes it easy to provide proof of purchase when seeking deductions.
3. Online shopping
With the Australian dollar falling, Aussies may be forking out more on fees with their credit card. For instance if you were to make a USD$500 purchase online you would incur a foreign transaction fee of 3% which is $15.
Most foreign transaction fees only apply for overseas outlets. Shop around for a no foreign transaction fee credit card to avoid paying these fees.
4. Set new financial goals
Now is the ideal time to look at your credit card spending in more detail. Set new goals on how much money you want to save. You can also use the money you set aside to pay off debt as the interest you earn from outstanding debt will outgrow your savings.
5. Look for the “exclusive deal” offer on comparison websites
Now may be the ideal time to compare credit cards on the market and switch to a new card. Some comparison sites like CreditCardFinder.com.au offer exclusive deals making it worthwhile to compare and see how switching cards can better suit your spending habits and save money.
“By making some simple changes to credit card spending habits, consumers can save big. Now is the time to take action and continue the trend in reducing credit card debt in Australia,” concludes Mr Cabral.
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