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Australians owe a record $44bn on credit cards, RBA says

Date Published : Monday, August 18, 2008

Statistics show that consumers currently owe a total of $44 billion on credit cards.

Recent figures from the Reserve Bank of Australia (RBA) show that the country's credit card liabilities have climbed $1.5 billion from December to over $44.2 billion, according to news.com.au.

The website claimed that the credit crunch has seen some people even resort to using plastic for living costs such as food, while a number of people have had to use a credit card to meet monthly mortgage repayments.

A 3.5 per cent rise in total debt since December means that the average credit card liability has increased to over $3,200.

In contrast to these figures, the Herald Sun reported in July that the RBA claims credit card debt levels are showing the slowest annual growth since records began in 1994.

This data revealed that impaired assets, also known as bad debts, were up to $7.29 billion for the March quarter, representing a record rise of 68.5 per cent as borrowers fail to keep up with repayments.

Christopher Zinn, spokesperson for consumer watchdog Choice, has suggested that it is very dangerous for borrowers to rely on their credit cards to meet everyday living costs.

"They are one of the most expensive ways, short of pay day lenders, to borrow money," he said.

Research released by Finsia indicates that the number of Australians who hold a Visa or Mastercard is 44 per cent and 25 per cent respectively.

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