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Your Credit Card - Know It Like It is Your Best Friend
The use of credit cards in Australia is escalating possibly on the back of a great economy breeding confidence although do people know how to service this debt and exactly how much it might be costing?

Australians owe $32 billion in credit card debt, according to Reserve Bank figures, and some experts predict this will balloon to almost $50 billion by 2009.

Thats an impressive figure and as it would it seem it's definitely on the rise with Baycorp Advantage, a credit info provider, saying that credit card applications have been up eleven per cent on last year with 875,000 applications for credit cards in October, December and November.

This is the concern, just seven years ago, the fees incurred on cards was $136 million but they've now soared to a staggering $787 million. This is partly due to an increase in the charge for late payment from twenty dolars to twenty nine dolars.

Analysts it would take five years of minimum repayments to pay off the $2399 shown by the Reserve Bank to be the average credit card debt in December. The typical credit limit rose to $6754.

This most likely does not apply to Australia alone as the trends in other countries are incredibly similar.

From these figures it might be observed that there's a lack of knowledge on the best way to use credit safely and effectively as well as possibly a lack of study into the terms and fees regarding the particular card being used. Some say this might be as a result of the heavy marketing around bonus point systems shifting the customers decision making from' terms and conditions' to' what do I get for nothing'.

Consumer groups have renewed calls for reform of the Uniform Credit Code to stop banks promoting unsolicited limit increases, and requiring them to print warnings of exactly how long it will take to settle the debt of theirs at current interest rates.

Credit cards aren't all bad though. Credit cards are safer and convenient to carry than cash. You are able to also earn rewards or get cash back on your purchases. They can also help build your credit rating. sensible and Disciplined use are important in addition to a good understanding of the way your charges are applied by particular card and choosing the right credit card for you in the first instance.

The key issues need to be considered when applying for and using a credit card. Asking questions of yourself is probably the first step. For example' Do I want a credit card' and' Will the payments fit into my budget'.

Choosing the right card should involve at the least reviewing :

The interest rate - Some cards offer an attractive honeymoon rate although it is the rate after this that is important.

The interest free period - this could certainly differ from card to card.

How's the interest calculated - from the time of purchase or time of statement?

The annual fee - some time bonus systems are balanced out by this yearly fee.

Administration fees - are there any and what are they?

Late payment & over the limit fees - when does it apply and just how much?

Some other charges - what some other charges are there?
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Cash advance - if you are intending to use review the conditions carefully and be conscious of how it works and what charges apply.

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