Australian credit card debt hits record high of $38.99 billion

Australian credit card debt hit a record high of $38.99 billion in December 2006 fueled by solid consumer spending in December on Christmas gifts and post-Christmas sales.

Despite reaching the new high December credit card spending only rose by 9.9% compared with November. This is somewhat lower to the past two years which saw increases of 11.4% in 2005 and just under 22% in 2004. This may suggest that the multiple interest rate rises may have impacted home owners and the rise of fuel costs may also have left smaller budgets than in previous years.

The average card balance for Australian credit card holders in December was $2,932. However, a trend that is emerging is that many customers are paying these balances off in full rather than paying the minimum and incurring interest charges.

There will of course be those who are still feeling the pinch after over indulging in the spending department recently. Credit card debt can unfortunately be much easier to get into than out of. With many credit cards charging up to 19% interest it can take many years to pay off a credit card balance buy only paying the minimum balance.

Richard Greenwood of Australian credit card comparison site Click4Credit.com.au suggests these tips for consumers suffering from credit cards blues.

* Interest is calculated daily so pay off what you can afford whenever you can.
* If you have multiple cards then focus on paying off the card with the highest interest first, once this is done, move onto the card with the next lowest interest rate.
* Transfer your balance to a card offering low or 0% balance transfer deals and then ensure you pay off the debt as fast as you can during the introductory period.
* Look for credit cards with low ongoing rates so new purchases do not incur high interest rates.