Credit Cards - Do You Carry a Balance? Is Your Card Maxed out?

Bargainbag on 04/07/2018 - 20:39

A recent ASIC report that came out saying that Credit Card debt is out of control in Australia with 550,000 people in arrears and 930,000 with persistent debt as of June 2017.

"One in six consumers is struggling under a mountain of credit card debt that might never be repaid, according to alarming research by the corporate regulator"

The full article is here : http://www.abc.net.au/news/2018-07-04/1-in-6-credit-card-use…

Given that this website actively promotes Credit Card offers, including frequent flyer points and zero balance/no interest offers, and also how much Oz Bargainers like to SPEND, I thought it would be interesting to open a little discussion on the topic to see how the average Oz Bargainer is fairing.

Personally I've had a love/hate relationship with credit cards, and have finally decided to cut them up and live without them. I currently carry a zero interest card with a balance of approx $3500 that I intend to pay off by years end. After that - never again! I intend to live without a credit card and pay cash.

I am sure most people feel awkward admitting they are in debt and may have a problem with credit cards (I know I do!) so I've also included a poll so you can leave your experiences anonymously, but also welcome general discussion as long as there is no blaming or self righteous financial advice!

Poll Options expired

  • 16
    I don't have a credit card and carry no consumer debt
  • 134
    I have no issue with my credit card(s) - I pay it/them off in full every month
  • 5
    I'm generally able to pay my balance off in full, with the occasional splurge (holidays eg)
  • 5
    I have an ongoing balance w no interest and don't care as I will churn to another zero interest card
  • 3
    I have an ongoing balance and I pay interest on it
  • 2
    My credit card(s) are maxed out but I have a plan to pay it off (and intend to pay it in full)
  • 1
    My card(s) is/are maxed out and I've given up on ever being able to pay it off
  • 1
    The debt collectors are harassing me on a regular basis
Financial

Comments

  • mysterytal on 04/07/2018 - 20:46
    +2

    Yes I carry a balance on one….and pay no interest as it's a 0% offer.

    I am one of those considered to be in "persistent debt". Don't tell them I have the cash sitting in a savings account earning interest.

    • JimmyF on 04/07/2018 - 22:07
      +5

      then why didn't you vote for "I have an ongoing balance w no interest and don't care as I will churn to another zero interest card"

      (its showing zero votes)

  • dcep on 04/07/2018 - 20:54

    good , couple with home loan interest rates

    interesting times ahead

  • TheBilly on 04/07/2018 - 20:56
    +4

    No credit cards but massive home loan lol

  • Skramit on 04/07/2018 - 20:59
    +1

    Every ozbargainer knows to pay it off in full every month except for when you’ve bought too many eneloops.

  • Clear on 04/07/2018 - 21:00

    Two credit cards. One has a $4,000 limit and the other has a $16,000 limit. Never tempted to spend spend spend and always pay them off :) Also gotta rack in those points.

  • chumlee on 04/07/2018 - 21:36
    -1

    When the government of the day racks up massive debt you can be sure the people are too.

    • HighAndDry on 05/07/2018 - 10:01

      What is this grade school logic? If the whole Liberal party jumped off a cliff would you jump off too? Added to that, national finances are nothing like individual household finances. That's been such a tired old point it's almost a meme by now.

      If you wanted to compare the two though, consider the fact that people do (and should) go into HECS debt for education and take on loans to buy real property in most cases. Debt is not all bad.

  • Colombian on 04/07/2018 - 21:49

    Couple with 3 credit cards no fees. Only use 1 of them for everything and paid in full each month. I got an app to track my expenses to make sure I'm on budget. The other 2 cards are 28 degrees and Bankwest for international transactions only.

    No Home loan at the moment, hopefully by next year. Savings towards a deposit.

  • try2bhelpful on 04/07/2018 - 21:51

    The only time I haven't paid off the full balance is when I forgot and when we paid off our home loan and forgot the additional interest. Credit cards are a convenient way to pay for goods but you have to be disciplined when using them. Credit cards are a bad way to buy something if you can't pay it all off at the end of the month.

    • HighAndDry on 05/07/2018 - 09:55

      Credit cards are a bad way to buy something if you can't pay it all off at the end of the month.

      Yup. Arguably there is no good way to buy something if you can't afford it. Just don't buy it. I doubt the bulk of the unsustainable credit card debt people are carrying went to necessities.

  • Randxyz123 on 04/07/2018 - 22:12
    +5

    Have 2 cards both set at $4,000. I'm approved for $20,000. I try to keep my spending on both under $2000 a month

    Pay them off in full each month automatically deducted from my bank account.

    I know banks are terrible in lending money to people who they know can't pay it back but it is also the customer's fault.

    Surely if you earn $45,000 a year and spend $30,000 on your credit card…THAT ISN'T GOING TO BLOODY WORK OUT WELL FOR YOU IS IT? I'd like some of these victims to tell me honestly. HOW WERE THE HECK WERE THEY GOING GET THE MONEY TO PAY?

    Seriously… It isn't that hard to write down your normal expenses and your income and figure out what you can spend on other things. Are people honestly incapable of doing that?

    My bank texted me asking if I wanted my limited raised to $40,000. Hell no I earn $70,000 a year.

    • AusGP on 04/07/2018 - 22:22
      +1

      I think because a lot of schools don't teach personal finance.

      • HighAndDry on 05/07/2018 - 10:29
        +3

        And parents don't teach self responsibility or self control. It takes personal finance knowledge to know how to maximise benefits from credit cards like OzBargainers do. It takes very little finance knowledge to know "If I can't afford it, don't buy it." That's just responsibility and self control.

    • Tech5 on 04/07/2018 - 23:23

      To the low extent of how much credit score matters, the raised limit is not a bad idea if you don't have problems with racking up debt. A low usage ratio is better for score no?

    • HighAndDry on 05/07/2018 - 09:54
      +3

      I know banks are terrible in lending money to people who they know can't pay it back but it is also the customer's fault.

      It is completely the customer's fault. Absolutely noone forces them to buy anything on credit. We don't blame car makers for people speeding just because their speedo goes to 140.

    • Ughhh on 05/07/2018 - 13:30

      Careful! Some people might jump in and say that's victim blaming!

    • mbck on 05/07/2018 - 17:40

      ahhhh banks have enough money anyways, give us free moooneeeeyyyyy

      lol, it's never your fault, but everyone's unfortunately for quite a fair amount of people. I mean yeah it's sad that you are in deep debt, but at the time when you spent 30k it was nice right? You can't have the chocolate cake and the ice cream AND the lamingtons at the same time

  • TheMindsetTraveller on 05/07/2018 - 00:03
    +1

    I have multiple cards at the one time, with total combined limits up to $150,000 depending on which card/s I cancel or acquire.

    I put every single purchase on card, irrespective how small the amount it.

    I use different cards for different reasons and goals (in terms of credit card points accumulation).

    I always pay my cards in full each month.

    It takes a lot of organisation to keep on track of when card payments are due however it is totally worth it if one is diligent and on top of things.

  • whirlpool_guy on 05/07/2018 - 00:49

    My ANZ credit card was my best friend. Awesome call centre service, Amex companion card - sooo easy to earn points. Balance paid off every month.

    That card is now long gone. Read from the paper that Amex companion cards have all but extinct.

    Today I'm in no hurry to apply for a new card.

  • jason101 on 05/07/2018 - 08:19

    May not be a brilliant idea to disclose your card limit on a public forum as this is one of the methods some lenders use to identify you by phone.

    • TheMindsetTraveller on 05/07/2018 - 09:51

      Was that in relation to my post?

      Lenders in assessing whether to give you credit or not, can easily check and find out which banks/lenders and amounts that someone has applied for in the past - so posting it here or anywhere online is often negligible.

  • Masterpupil on 05/07/2018 - 09:26

    I keep that the increased limits, but have never gone near the max on any credit card even owned. Very debt adverse. I have an AMEX for the deals and a VISA from my bank just for online purchasing etc. I do not like the idea of using my primary account for online purchasing via Mastercard Debit, even through Paypal.

  • HighAndDry on 05/07/2018 - 09:52

    "One in six consumers is struggling under a mountain of credit card debt that might never be repaid, according to alarming research by the corporate regulator"

    I'm not seeing how this is any problem other than lack of responsibility by individual consumers. Self discipline is a thing.

  • Oz8argain on 05/07/2018 - 10:18

    I don't understand how some see their credit as 'the money they have'.. If you can't afford it, then don't buy it! You should have an idea of how much you can and how much you should spend each month. Why is that so hard to understand for some..

    • mysterytal on 05/07/2018 - 10:24

      There are some useful uses for credit cards. If the fridge or washing machine breaks some people can't wait 6 months to save the money to buy another they need one now. That can be put on the credit card and paid off over time hopefully at 0% interest if they have good credit.

      • HighAndDry on 05/07/2018 - 10:28
        +2

        The better solution is to have an emergency fund of 2-6 months income for unexpected expenses like this. Needing to rely on a credit card in emergencies because you have no cash or other liquid assets is how people get into credit card debt they don't crawl out of.

        • Oz8argain on 05/07/2018 - 10:37

          100% agree!

        • try2bhelpful on 05/07/2018 - 10:48
          +1

          I agree completely, have an emergency stash in an account you have difficulty accessing. People want stuff now, so they put in on the "never never" and then dig themselves into a bigger hole. The "short term" loans are an even bigger trap with their exhorbitant interest rates.

          One of the options above is:
          "I'm generally able to pay my balance off in full, with the occasional splurge (holidays eg)"

          Surely holidays are the worst reason to not pay off your credit card bill.

          I think the issue is exacerbated by social media BS where people are trying to one up each other. Get off social media, stop going on holidays, stop buying crap and start paying off your bills now.

          I hate to do the "when I was young" but I grew up pre credit cards, social media, mobile phones; back then banks only gave out loans if there was something they could use as a security against it. It meant we didn't have many shiny new things, or went on holidays much, but we weren't continually stressed with paying off debt we couldn't afford. Our house has been paid off since 2001, we have built up our super, we have money in the bank and we are going on holidays now when we can afford it.

          My mantra is if you don't have enough money in the bank to cover the credit card in full then you can't buy stuff.

        • HighAndDry on 05/07/2018 - 11:19

          @try2bhelpful:

          "I'm generally able to pay my balance off in full, with the occasional splurge (holidays eg)"

          Oh jeez I didn't even see that. That is terrible. If you need to put it on a credit card to "splurge", you can't afford to splurge. And if you can pay off the "splurge" in 6 months or 12 months afterwards or whatever, save up for that 6 to 12 months first then splurge.

      • Oz8argain on 05/07/2018 - 10:36
        +1

        I see, that would come in handy. However, I would argue that if a washing machine breaks and you can't afford to replace or repair one, there're bigger financial issues at hand..

      • scotty on 05/07/2018 - 11:14
        +4

        I think ozbargainers have a different problem — when the washing machine or fridge breaks, whether they can afford to wait until the next 20% TGG or Appliances Online sale on eBay with 2% increased cashback.

  • tsunamisurfer on 05/07/2018 - 11:12

    I have had a credit card for almost 20 years.

    In that time, I've paid just under $1 in interest due to a miscalculation by me early on.

    It is a personal rule that the CC balance is cleared at the end of each month.

    This will sound awful but in order for Ozbargainers to enjoy great Credit Card deals like lifetime fee free, points / rewards and international transaction fee free, there must have to be a lot of people who make it profitable for the bank. I mean those who have big balances @ 20% are a bank's dream and for one fully respect their decision to not pay off their balances in full before incurring interest.

    • HighAndDry on 05/07/2018 - 11:17

      Doesn't sound awful at all. No one is forcing anyone to use credit cards or carry an interest-incurring balance on them.

    • Clear on 05/07/2018 - 11:39

      there must have to be a lot of people who make it profitable for the bank.

      That would be me. I try to make EVERY purchase on my CC as it gains points for every transaction. Obviously I make sure I only spend money that I have and pay it off in full every month. A CC isn't unlimited money.

  • AncientWisdom on 05/07/2018 - 12:31
    +1

    I used to put everything on the cards and would mostly pay the balance in full except a few times I made mistakes and a few times I overspent for whatever reason.
    Last year as a result of following the barefoot method I've switched to paying most things in cash, the only exception being fuel and food (which are my biggest spend categories) on Amex Platinum Edge and international purchases on 28 degrees.
    I cancelled an amex Explorer and Woolies Platinum before applying for a home loan (but was going to do that anyway as the annual fee was not worth it for me) as well as lowering my limit to exactly what I need.
    Even though I miss out on points on some of my spending this system is much easier to follow and monitor and I don't make mistakes. In addition I have both cards on direct debit but pay their balance in full every fortnight.

    I was never taught financial literacy at home or in school and it's taken me a while to work it out, but I'll make sure my kids to get taught those things because I think it's arguably one of the most important skills a person needs to have in modern society.

    • HighAndDry on 05/07/2018 - 12:41

      I feel like the perceived need to learn or teach financial literacy is over-blown. I mean, if you were never taught it but still knew to pay off your cards every month (even if you didn't - you knew to do it), you've known to cancel cards before applying for loans, and using Amex I assume you knew how to get rewards and benefits from these cards… you did just fine. It's really a lot of common sense and now with the internet, easily google-able.

      • AncientWisdom on 17/07/2018 - 17:20

        Yes but personal finance is an area of interest to me so I self taught myself. Looking around me, not many people know those things.

        • HighAndDry on 17/07/2018 - 17:51

          Yeah that's definitely true. There should honestly be a course in High School, around the year 11-12 mark, just called "Life." Or I guess something more official sounding like "Civic and Social Systems". And it would just teach kids basics like how to do personal budgeting, how bank accounts, interest and credit cards work, how car insurance works, how medicare and private health insurance works, what to do if you get a parking ticket, what to do if the police ask to talk to you or if you're pulled over.

          Because yeah you're right. Looking around… a fair few people seem to have missed that part of the general life curriculum for whatever reason, and it tends to be pretty important.

  • [Deactivated] on 06/07/2018 - 11:22
    +1

    15 years ago I had a $4k amex maxed out often with late payments etc. My mum was aware of my struggles and offered loan the money to pay it off under the condition I got rid off it and didn't get another. Best thing I ever did. I still dont have any credit cards. (I have a debit mastercard) I would never get another card.

  • bad hombre on 08/07/2018 - 19:51

    2 cards - 30k limit on one and 40k limit on the other. We never spend anywhere near those limits. I think the banks just give these limits to us in the hope that we will spend up big.

  • Samsungnote10 on 18/07/2018 - 09:09

    Low income here
    5 cards
    Total limits 210k
    Pay off every month

    Love it to bits, like someone said, I put everything on card, except at Chinese restaurants

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