Credit Card Debt Still Mounting
Recent credit card statistics released by Citibank, which took account
of Visa
credit cards, MasterCard and American Express spending
trends, indicated that at least one out of every three Australians will
make purchases that are in excess of $3000, even though many people now
realise that a personal loan can be a far cheaper option.
Of a survey group containing 1000 people, a very low 38% of them were
able to make such purchases directly from available funds, or from a savings
account.
In addition, even though the interest rate upon a personal bank loan is
far lower than a traditional credit card, only 10% of the survey group
chose to make use of this type of lending. The remaining 33% of the
people questioned, opted to use their credit card for the purchase.
Local demographics were also deemed to effect the borrowing decisions
of the population, and were clearly represented by the fact that in
Queensland, only 7% of the people questioned decide to use a personal
loan for a major purchase.
Although these figures may seem to lean heavily towards the use of a personal
loan for major purchases, it should be pointed out that some
of the more competitive credit card offers can come very close to the
same low levels of interest. If we add to this, the obvious flexibility
of a credit card form of borrowing, such as the ability to fluctuate
payments, paying up the debt sooner if funds are available, and having
credit on hand for emergencies, then the advantages become less
obvious. Certainly, for some people, even though the interest rate may
be higher, making a large purchase from an available credit card
balance may well be the prime solution. The best credit cards
offer immediately available funds at a fair interest rate, with no need
for a drawn out application and approval process before you can make
your desired purchase.
If you take the time to locate the best credit card for your needs, it
can perform equally or better than a personal bank loan, and will
provide you with a lot more freedom in the way you control your
spending and debt.
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