Published on January 8, 2017 11:53 pm, by Pete Lalor
96% of Aussies surveyed by MoneyBrilliant said they have at least one New Year’s resolution. The most popular, even above losing weight and spending more time with family, was debt reduction. 50% of people said they are committed to reducing debt in 2017.
People planning to reduce debt were mainly targeting Mortgages (31%) and Credit Cards (25%).
Over 7.5 million Australians hold credit card debt totalling more than $50 billion. $32 billion of that has interest charged each month, indicating that a majority of people are not paying off their balances in full each month.
The average person with a credit card has a balance of just over $4,000 and pays over $700 a year in interest. Many people put a bit extra on their card in the lead up to Christmas. The average credit card balance increases by about $500 leading up to Christmas which is then paid down during January, February and March the following year.
It’s no surprise then that 25% of survey respondents are targeting credit cards.
To reduce credit card debt we suggest managing your spending and chipping away at the outstanding balance. Paying off as much as you can helps reduce the interest you pay. You can then pay more off the balance each month.
You should also think about which debts you pay off first – if you can manage your payments you might be able to prioritise paying the debt with the highest interest rate first. You might also want to think about whether you have the best credit card for your circumstances. Some institutions offer credit cards with interest rates of about 9% – which can make a real different to your interest payments if you carry forward a balance each month.
73% of people surveyed said they would use a website or app to help them manage and meet their New Year’s resolutions. MoneyBrilliant can help you set a budget, monitor your spending and track your progress towards goals like reducing debt.
Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.