Australia is waking up to an almighty festive financial hangover, with new data indicating the nation racked up $29 billion worth of credit card debt in December.
Aussies spent, on average, $1,727 per credit card in the month leading up to Christmas, a Finder.com.au analysis of Reserve Bank data revealed.
Based on the average 55-day interest-free period, it’s predicted that the interest alone from the Christmas haul will cost $230 million collectively. So the quicker cardholders repay their holiday credit card debt, the less interest they’ll accrue. Four out of five card holders (81%) plan to pay off their debt in three months or less. The remaining 19% will take longer than three months to service their debt, with 5% taking a year or more to pay down their balance.
That means that some people will still be paying off last year’s Christmas debt come January 2020! Not only does this mean that some Aussies will have a cloud of debt following them until the end of 2019, it also means that their interest costs are likely to pile up.
If you can’t pay off your current Christmas balance in full and think it could take months or years to get your debt under control, it might be time to consider consolidating into one affordable monthly payment and pay it off over a short term.
Why pay up to 29% on a credit card when you may qualify for a personal loan at 10.99%, with a lower monthly payment to have this paid out quicker.
Don’t get caught again this year with no Money for Christmas… try these suggestions:-
- Deposit set amount each week into a bank account with no ATM card, no internet banking, no access. Just before Christmas go into a branch and withdraw the money to use then.
- Buy a large Money Tin (with Australian currency printed on the side) from a $2 shop, the one that can’t be easily opened to steal the money. Throw all coin each day in there (You’ll be surprised how quickly this adds up).
- Tax Refunds could be used to purchase vouchers or gift cards to be used either as presents or for your Christmas shopping. This way they cannot be cashed in and must be spent on those purchases.
- Don’t forget Reward points on any credit cards, you can use these points to purchase gift cards as well.
- Pay off hampers for Christmas weekly eg: Crisco. This ensures you receive your food for Christmas and once paid weekly you can’t get it back so makes you put the money toward your food for Christmas and not spend during the year.
- Don’t forget to purchase presents during the year if possible. One present each pay day helps relieve the financial burden of buying presents all at once.