Money Australians left with $29 billion credit card debt bill after Christmas

08:06  10 january  2018
08:06  10 january  2018 Source:   MSN

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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, ,727 per credit card in the month leading up to Christmas , a

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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.

Factoring in the 55-day interest free period offered by some banks, it's estimated that the interest left to be paid on Christmas credit card debt will total $230 million.

Insights Manager at Finder Graham Cooke said some Australians were looking at a timeframe of months to pay off the purchases made for just one day of the year.

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"Aussies spend more on credit cards in December than in any month," said Cooke.

"This over-reliance on credit cards in December means the cost of Christmas is carried well into the new year and could take a toll on household budgets throughout 2018."

A survey of credit card holders found that 81 percent of borrowers planned to pay off their holiday debt within three months. Almost 20 percent will take longer than three months, with 5 percent of borrowers taking a year or more to wittle down their debt.

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The .87 billion increase has stunned experts with figures showing the average credit card debt of 21. More Australians will default on credit cards , homes, businesses and cars will be repossessed, relationships tested and lives left in tatters.

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Official retail figures for December 2017 are yet to be released, but the Australian Retailers Association and Roy Morgan Research estimates total pre-Christmas sales will reach as high as $50 billion.

"Although there have been various disruptions to the Australian retail market throughout the year, we look forward to seeing our pre-Christmas and post-Christmas predictions come to fruition when the retail trade figures are released in the new year," Russell Zimmerman, Executive Director of the ARA said.

The credit card debt bill coincides with the release of ANZ's Consumer Confidence Index, which has shown a moderate rise of 4.7 percent, reaching a new high not seen since November 2013.

ANZ's head of Australian economics David Plank said that while consumer confidence usually rises in the first reading for January, this year's lift was more than just a festive boost

"The increase this year is stronger than the 3.6 per cent average lift in confidence for the past nine 'annual turns', indicating that the gain in confidence is more than just seasonal," said Plank.

"It is encouraging that consumers seemed willing to overlook their high debt burden, moderating house price gains and the impact of higher petrol prices."

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