Australian financial regulator's new report indicates new alarming issues in regards to Australian consumers' credit card debt.
The Australian Securities and Investments Commission (ASIC)'s new report show one in six Australian are struggling to pay their credit card debt and may never be able to repay and it is a very big concern for them.
Beverley Ferguson who is 70 years old has started to have financial difficulties when her husband passed away a decade ago. And as pensioner, she has recieved credit card advertising in her letter box. Since then she keep drawing the credit card into her debt.
"I am very worrying, very worrying. How can I pay a $ 10,000 debt when I've got no money, and it was a worry, a constant worry. Every day, I dread the phone ringing. Because I'd know they were ringing me again and I didn't know what else I can do," said ms. Ferguson.
She then seeking financial advice in order to get her life back on track.
ASIC chief Michael Saadat sais that "I think one of the key findings of our report is that one in six Australians is struggling with their credit card debts. Which means that they're either behind in repayments, they're making consistently repayments or they're completely using the full credit limit over an extended period of time. And for those consumers who are struggling with their credit card debts, they are paying very high rate of interest over a long period."
The total credit card debts is now amounted to $45 billion dollars. But under ASIC reviews, over 21 million credit card could save $621 million dollars if Australian consumers switch to lower credit card rate. Therefore, Christopher Zinn who is a consumer advocate would like to suggest to Australians that they should be the one who control their own financial issues.
"Take contral yourself. Now there are many low rate cards, the big four banks offer them, a range of other providers offer them too. You can get down to 8%, in terms of the purchase, that's pretty good as opposed to 21%. So you can move to lower rate cards, get in control of your cards and don't lets them control you," said Zinn.
There has been reports that consumers who changed to lower rate cards also experience some difficulties due to the conditions they have to abide by. However there is good news, as ASIC is proposing new laws to put limit on credit card and consumers has to repay within three years, and if approved, it will comes into effect in January 2019.#
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