Published Friday, 14 December, 2007 at 08:36 AM
Attorney-General and Minister for Justice and Minister Assisting the Premier in Western Queensland
The Honourable Kerry Shine
Consumers Warned to Avoid Credit Hangover:Shine
The Attorney-General and Minister for Justice Kerry Shine has warned consumers of the dangers of going on a pre-Christmas credit spending spree.
Consumers need to resist the urge to whip out the credit card for last minute purchases they can’t really afford, Mr Shine said.
“Spending on credit can mean paying off Christmas well into the following year.
“At worst, credit card debt can lead to bankruptcy,” Mr Shine said.
Mr Shine also warned consumers about the dangers of extending credit limits and using credit cards to access cash.
“Credit providers often invite consumers to extend their credit limit without considering their income or other financial obligations. This can lead to consumers over committing themselves, with disastrous consequences.
“A cash advance on a credit card is one of the most expensive ways to access cash, with lenders charging up to 19.99 per cent interest with no interest free period.”
“Internet shopping also poses risks at Christmas, as consumers may be tempted to make impulse purchases.
”The only way to buy online is by card. However debit cards are better than credit cards as they are linked to your bank account, so the money you’re spending it yours, not the bank’s.
“Store cards offer rewards for accumulating points or other bonuses, but they can still disadvantage consumers, who pay up to 33% interest, substantially more than credit cards.
“During this festive season, it’s easy to forget the stress that debt causes. My advice to consumers is:
• prepare a budget and stick to it;
• think twice before increasing your credit limit;
• if you find it hard to control your spending, ask to have your credit limit decreased or reassess your need for a credit card;
• keep track of what you spend, (keep receipts, check transactions against statements);
• plan to pay off the balance as quickly as possible to avoid paying interest.
“We all enjoy giving gifts at Christmas, but if you spend beyond your means, the joy of giving can quickly turn into the pain of a credit card hangover in the New Year.
For more information go to the Office of Fair Trading website at www.fairtrading.qld.gov.au to download a copy of the Good Credit Guide or phone 13 13 04 to have one sent by mail.
Media contact: Troy Davies 3239 6400, 0488 799 273
Consumers need to resist the urge to whip out the credit card for last minute purchases they can’t really afford, Mr Shine said.
“Spending on credit can mean paying off Christmas well into the following year.
“At worst, credit card debt can lead to bankruptcy,” Mr Shine said.
Mr Shine also warned consumers about the dangers of extending credit limits and using credit cards to access cash.
“Credit providers often invite consumers to extend their credit limit without considering their income or other financial obligations. This can lead to consumers over committing themselves, with disastrous consequences.
“A cash advance on a credit card is one of the most expensive ways to access cash, with lenders charging up to 19.99 per cent interest with no interest free period.”
“Internet shopping also poses risks at Christmas, as consumers may be tempted to make impulse purchases.
”The only way to buy online is by card. However debit cards are better than credit cards as they are linked to your bank account, so the money you’re spending it yours, not the bank’s.
“Store cards offer rewards for accumulating points or other bonuses, but they can still disadvantage consumers, who pay up to 33% interest, substantially more than credit cards.
“During this festive season, it’s easy to forget the stress that debt causes. My advice to consumers is:
• prepare a budget and stick to it;
• think twice before increasing your credit limit;
• if you find it hard to control your spending, ask to have your credit limit decreased or reassess your need for a credit card;
• keep track of what you spend, (keep receipts, check transactions against statements);
• plan to pay off the balance as quickly as possible to avoid paying interest.
“We all enjoy giving gifts at Christmas, but if you spend beyond your means, the joy of giving can quickly turn into the pain of a credit card hangover in the New Year.
For more information go to the Office of Fair Trading website at www.fairtrading.qld.gov.au to download a copy of the Good Credit Guide or phone 13 13 04 to have one sent by mail.
Media contact: Troy Davies 3239 6400, 0488 799 273