The Credit Card Industry
This seemingly unimposing piece of plastic holds more power than one would think. It has the power to make purchases – big and small. It has the power to make or break one’s finances. In Australia, there are nearly 13 million credit cards in active use – and mind you, this figure was estimated late last year. There are probably millions more as you read this today.
Just how big is the credit card industry in Australia? Reports show that the total debt that can be attributed to credit cards amount to more than $36 billion! Of this, a huge chunk is due to interest!
Despite the high interest rates, it seems that Australians are using more and more of their credit cards. The reason? Financial experts believe that the budgets are becoming stretched and so they are being forced to use their cards more often instead of cash. Labor Treasury spokesman Wayne Swan actually said “Family budgets are stretched, so some families have no choice but to put the basics of life, like groceries and petrol, on the credit card.”
The reason I touched on some statistics for this post is to introduce a mini-series on credit cards. As I mentioned earlier, a credit card is one powerful tool that has many advantages if you use it correctly. Yet it is also very easy to slip up and end up in a mountain of debt. So in the next several posts, we will be looking at credit cards, whether or not you need one, what kinds of cards are there, and other tips to help you out.
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