Paying Off Monthly Balance Keeps A Family Card-sharp And Debt-free
The Sunday Age
Sunday October 19, 2008
THOSE who pay off their credit card each month, such as Bruce Tyzack, 51, who lives with his family in Tullamarine, don't have to worry about interest rates. Just as well - he and his wife have three cards.
The credit card interest rate "is obviously way out of whack", he said. "My credit card rate is 19.9% and I've got money in the bank earning just 7%. I don't have a real big opinion of it (credit card rate) because it doesn't concern me, but I suppose if I had a credit card debt of $5000 I wouldn't be too happy at paying 19%."But why not avoid the problem altogether and use a debit card? "A credit card statement gives me the chance to track my spending."He is not surprised, however, that credit card rates are what they are. "People have got credit card debt because they're short of money, so they're basically being penalised because they don't have a lot of money."Mr Tyzack's financial adviser, Kerry Sharp, of KW Sharp and Associates, agrees. The amount of credit card debt a consumer has is not linked to the interest rate, but other factors - generally financial management issues specific to that person, he said. -- STEPHEN CAUCHI
© 2008 The Sunday Age
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