Rising interest rate increase credit card spending

21 January 2008

Another home loan interest rate is pending next month and many consumers have to use their credit card for day-to-day expenses as their pay packet is stretched to meet their mortgage repayments.

Using your credit card for day-to-day expenses isn't the only way consumers are getting by.

There are several home owners who are tapping into their equity to maintain their standard of living.

The world wide credit crunch has affected all Australian home owners who have seen their home loan repayments go up as banks and other financial institutions look to recoup some of the costs and losses they have accumulated since the sub-prime mortgage fiasco unfolded in the United States.

Coupled with Australia's growing economy and tight labour market, pressure is being put on Australia's inflation rate, which is growing faster than expected.

Even everyday items such as fuel has been hovering around $1.50 putting even more pressure on the family household income.

Credit cards are certainly helping many overcome their financial difficulties at this time but consumer groups are worried that the short term relief will only lead to long term pain.

Those who are finding it difficult to repay their credit cards should look into balance transfer credit cards being offered by many leading banks.

The balance transfer credit card offers you a low or zero rate of interest for a specific time frame which could help ease some financial pressures you may be facing.

Conditions do vary amongst the different products offered so be sure you know what you are signing up for should you choose to change credit card companies.

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