Credit Card Smarts

Do you always max out your credit cards? Money magazine founding editor Pam Walkley shows how to avoid spiralling debt by using your plastic wisely.

- Pam Walkley

If you or your kids are finding it harder and harder to balance the family budget, you’re not alone. In Australia, household debt is causing real concern. Despite record low interest rates, our indebtedness has grown as more of us aim to own homes and rely on products such as car loans and credit cards, according to financial product comparison site finder.com.au.

Very sluggish income growth hasn’t helped the situation. Recent figures from the Reserve Bank of Australia show the nation’s household debt-to-income ratio has climbed to its highest ever level at 189 per cent. Collectively, we owe a massive $52.2 billion just on credit cards and $32.5 billion of that is accruing interest. In March alone, more than half a million Australians failed to pay off their credit card balance in full, according to Credit Simple, which has an online tool which will provide free access to your credit score.