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Date Published : Wednesday, April 09, 2008
A quarter of young Australians will be forced to use their credit cards to cover ever increasing debts in the next three months, a new study has revealed.
The report by Dun and Bradstreet found that those aged between 18 and 34 years old were more likely to turn to their credit cards in order to stave off short-term financial troubles.
One in every ten people polled for the Consumer Credit Expectations Survey also accepted that their finances were in such a state that they would miss a deadline for a bill or a credit card repayment.
However, despite these problems - and the current credit squeeze - young people are still undergoing a regular credit card comparison. According to the study, 24 per cent of young Australians plan to apply for a credit card or a personal loan in the coming three months, the Brisbane Times reports.
Nicola Howell, director of the Centre for Credit and Consumer Law at Griffith University, said: "Using a credit card as a payment tool is very effective if you're able to repay the balance at the end of the month.
"However if consumers expect to be able to pay the balance but then find they can't, they are going to be charged interest."
The study also found that an increasing number of 18 to 34 year olds were showing signs of severe debt stress and anticipated "problematic" credit card use in the June quarter.
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