Curious to know how much people currently owe on their credit cards - after the interest free period, i.e. the amount that you actually get charged interest on.
I feel like the information out there always includes the amount people owe DURING the interest free period.
Personally I usually pay it off before interest free period…
I'm in the same boat, my two credit cards are on direct debit from my bank account. One is the 28 degrees MC so I avoid foreign transaction fees and the other is the QFF $0 Amex to accumulate some points and get offers. I have never been unable to pay off my credit cards at the end of the month.
If you're paying even a cent of interest on something that wasn't a large emergency expense then its time to reassess how you spend your money.
Exactly, well said. If you can't afford it now, you are only going to make it worse by adding huge interest to it later!!!
Yeah who is crazy enough to pay interest on cc? You better off cut the card if you can't pay it before free interest day finishes.
Media frequently reports ridiculously high "personal credit card debt", but I keep thinking that is taking into account of all the "interest free debt" before the due date, therefore completely misrepresenting the true level of personal debt.
There are a lot of Australians with poor financial education.
Maybe ozbargain has higher percentage of financially smart people…
Just found out my mid 20s old brother doesn't know/who to use bpay… ;(
Quite a lot but the interest rate is at a low fixed rate. 3.95%. The card was offered to me many years ago as a promotion for the life of the balance transfer and I've only ever paid the minimum payment. I have no intention of ever paying it off any faster. I think it's going to take about 20 years to pay it off by paying only the minimum payments. I used the $20,000 to pay off my mortgage.
I also have an AMEX card which I pay for in full each month.
You have CC with 3.95% interest holy cow!!!!
Where do i sign up?
I've seen a few good deals in the past for low interest rates on balance transfers, usually 0-2% for 3-5 years on balance transfers up to $20k.
Have NOT seen one that's for the life of the balance though, which is nice, though the 0% ones come up often enough that you can probably jump from one to the next indefinitely if you could be bothered.
Yeah that's smart debt - kind of. I was more interested in the bad debt on 20-25% interest rate.
I'm doing a similar thing - 0% for 18 months = $1000 of tax-free income.
Don't you want to refinance your mortgage to get rate less than 3.95%?
I think there are few lenders with lower rate than that.
I've never paid a cent in interest, but I just put part of my holiday on there, so about $2k right now. But will be paid in full on December 1st.
If I wanted to owe someone money i'd contact my local organised crime member.
I haven't had a Credit Card for about 8 years now and only got rid of that one because I never used it. I have a Visa Debit for online and keep a cash float for any unforeseen needs (and OzBargains you can't refuse).
Nope. Use credit cards is a wise thing to do but pay in full. Collect points and offers. Borrow isn't wrong as long you can control it.
Having never used a CC for ages, what offers exactly do you get for nothing? What freebies have you received yourself?
For example, cheque to self balance transfer (rare now) or Amex offer. Top up opal or myki for half price.
For me the biggest advantage is the security of the card company dealing with bad merchants & Travel insurance. E.i Damaged goods etc.
If you are paying even a cent of interest, you are in a very bad spot.
So if I was to be earning $200K pa with no debt, and I paid a cent of interest for whatever reason… I'm in a very bad spot?
Rrriiiiiiight
Yes. It is wasteful.
That's ridiculous. Best example is putting $20k on a low/zero interest balance transfer, and using those funds to pay down a higher interest loan, like a mortgage, or even into a term deposit that pays higher interest (unlikely but existed a few years back).
in that example no interest is paid.
No, it could be a low-interest balance transfer, e.g. 1.90% pa. You then put that money into your offset account for your mortgage saving 3.90% pa., or into a term deposit earning 2.90% pa.
You still pay interest on the balance, but you're either saving, or earning, more interest elsewhere with the same amount of money.
65K
I owe $140 but I am going to claim hardship.
I know some people who pay interest sometimes. They will carry a balance for three or four months after they have a holiday or move house.
I also know a couple of people who I conclude have very high ongoing balances, but they are a bit secretive, they know they are doing the wrong thing and don't want further lectures.
I maxed out all my cards once when moving houses to cover the deposit on the place we bought in the gap between buying and selling.
When I was younger and knew lots of people still living pay packet to pay packet there were plenty of examples of this. The car transmission blew up, cost $2000 to fix and they had $150 in the bank. What else do you do? The reason I was never poor is that I had relatives I could borrow from or stay with if such a disaster ever hit me, but I have been broke.
If you are broke and don't have that luxury, a piece of bad luck can be very costly.
If you are young and earning $2k a month, paying off an unexpected $2k bill takes a long time.
Better a low-rate CC than a payday lender :/
Hell, better a high-rate CC than a payday lender.
That's true. Perhaps the figure is a lot higher for younger people. Average Australian credit card debt per card holder is quoted at $4300 though… That just seems v high to me, so thought I'd see what others feel about this figure…
I'm above average then. I currently owe about $6k. The thing is, I have the ability to pay it all off right now, but why would I? $3.5k is a 0% balance transfer for 12 more months so I'm only paying the minimum on that and I'll see what's around when the time comes. This is the second rollover of that BT already.
The other $2.5 is mostly an erroneous work bonus that they asked me to repay and gave me the option to get rewards points for it! On a different card that will be paid in full on the last day possible.
Bah. "Average" is a shit statistic. "Median" figures are much better, because averages can be skewed by a few people on either end of the spectrum.
In this case, there's likely some people drowning in CC-debt of $100k's (or even high networth people who just rack up that much monthly no problems), and since you can't get into NEGATIVE CC debt, that'll push the average up.
I no longer have any credit cards and it feels great.
The credit card payments I was making now go into a HISA and I earn interest rather than pay interest.
$0. Always pay whole balance monthly.
$0. Never paid interest.
$0 at end of month
Monthly spend about $20k
$0, credit card debt is for dummies. I borrow my cash from Wallet Wizard :P
$0, never paid interest, but know a ton of people who do…
$0. If I cant pay for it immediately, I don't buy it. I'll save up until I can.