Credit Card Applications Up in Australia as Year Ends
The holiday season keeps Australians on their toes. It’s at this time of the year when they’re busy preparing for their Christmas celebrations with family and friends and buying gifts.
As people get preoccupied with Christmas preparation, an increase of credit card applications from Australians has also been noted. Reports from Veda, a credit reporting agency, showed a 10 percent hike in the number of credit car applications in the last quarter of the year for the past five years. An increase in defaults has also been observed particularly among those who applied for credit between October and December.
The rise in the number of applications is attributed to the so-called Christmas rush. By November of each year, people tend to be focused on thinking about what gifts to buy for their family and friends. And with the pre- and post-Christmas sales going on, many could not resist the temptation to buy more than usual.
Amidst this situation, Australians are warned against over committing which can lead to credit regret. Authorities in the industry are concerned that when people take out cards during this busiest time of the year, there’s a possibility that they will default in the end. They see an 8.5 percent of this situation happening.
In 2011, credit card debt by the Aussies reached $49.3 billion based on data from the Reserve Bank. The increase was 42 percent from the past five years. On the average, a credit card holder owes $3,321 and still going up as the cost of living rises. The rising debt is said to be caused by the struggle to repay what they owe on not just one but two or more cards.
It is worth noting here that every year, more than 70,000 Aussies are visiting websites catering to debt resolution services. Their purpose is to seekhelp in settling their financial obligations particularly with credit card companies.
Financial analysts including the Veda agency advise consumers to manage their credit, use their cards properly and do their research to help them make a guided decision. They stressed that when financial difficulties befall a couple or family, they can adversely affect relationships. Reports have it that financial hardship more than infidelity is one of the top reasons why couples split up.
Oftentimes, people easily get attracted and even blinded by the incentives offered by credit card companies. They apply for more than one but end up regretting their decision later when their bills pile up and they’re finding it difficult to repay their debt.
About the Author:
Morris is a financial consultant who strongly advises consumers to avoid being impulsive when shopping for credit card deals.