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Christmas debt worries not over as wait for bills continues

Date Published : Monday, January 07, 2008

Consumers are bracing themselves for their credit card bills after a record period at the stores for Australians this Christmas.

With $250 million being spent on Boxing Day alone and billions of dollars being put on credit cards in the run up to Christmas, Australians could be hit with the biggest credit card bill in the nation's history this month, news.com.au reports.

According to a survey by Wizard Home Loans, the new year's resolutions of 40 per cent of Australians is to put their personal finances in order and, after hitting the malls before and after Christmas, it could take a long time before many consumers to get their finances balanced again.

Wizard chairman Mark Bouris told the news provider: "2007 has been a tough year for many Australians as they've had to cope with two interest rate increases, the threat of another in early 2008 and a significant amount of commentary and speculation regarding what the US subprime crisis means for mortgage holders in Australia."

However, consumers wishing to transfer what they owe to a zero-interest credit card, in order to avoid paying interest for a number of weeks, have been advised against such a move. Instead, Members Equity Bank head of strategy Sue Jamieson said consumers would be best advised to take out a personal loan.

Ms Jamieson added: "People need to understand that once the cheap introductory deal ends, there can be a marked increase in the ongoing rate."

Figures from the Reserve Bank published last month showed that Australians owed an average of $2,993 on credit cards in October 2007.

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