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Date Published : Thursday, January 24, 2008
More than one million Australians only make the minimum payment on their credit card bill each month, new research has found.
Amid widespread concerns that Australian consumers are not doing enough to get out of their debt problems, a study by Datamonitor revealed that almost a quarter of credit card customers admit to sometimes buying items they cannot afford with their card.
Nine per cent of those polled said that their financial problems were so bad that they were only able to pay the minimum amount on their credit card bill each month, meaning that the interest charged on top of the balance further increases debt worries.
However, the survey did find that 39 per cent of Australians never pay interest on their credit card purchases, after shopping around for zero per cent interest cards. A further 18 per cent have their finances sorted well enough to only rarely pay interest.
Petter Ingemarsson, financial services analyst at Datamonitor, said: "Most Australians are financially savvy, but a minority are tempted by the easy availability of credit.
"Australian credit card providers thus need to be careful selecting who to offer credit, and be transparent in communicating associated costs."
The study of 2,000 consumers from a number of locations across Australia found that lower fees attracted 86 per cent of those asked to a particular credit card, while only 47 per cent used reward schemes as a reason to join a card provider.
Government statistics show Australians owed a total of £31 billion in credit card bills at the start of 2008.
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