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MoneyHelp in Victoria, a free financial counselling service, has recently come out in the media claiming that they are fielding 100 phone calls a week for people in financial hardship with credit card debt.
In the past 3 months, on average, more than 50% of callers advised of $10,000 of unsecured credit card debt and 1 in 10 callers disclosed unsecured credit card debt of more than $50,000.
It was noted that on average at least 1 person a week was reported as trying to sustain $100,00 of debt while also managing at least 5 credit cards.
Recently the Consumer Action Law Centre has been pushing for more responsible lending and easier ways for consumers to cancel and switch credit cards as well as direct debits which, historically, consumers have found difficult to cancel despite requesting that the service provider do so.
While most continuing credit facilities had relatively small balances it was found that consumers are often enticed to increase their limits or transfer balances between cards following the advertisement of interest free periods and low introductory interest rates. While this may provide the consumer some relief in the short term, in the long term they often end up paying more as introductory rates revert to a higher interest rate and other fees and charges continue to accumulate on new purchases.
The Australian Bankers' Association said that there were strong measures in place to protect consumers including responsible lending laws and encourage those in debt to contact their Creditors to seek hardship assistance when required.
Source: The Herald Sun