RIDING THE WAVE OF EASY CREDIT
by Gavin King CA
Australia is on a huge wave of easy credit as a result of a number of factors including historically low interest rates and booming house prices along with the increasing availability of easy credit from buy now pay later providers as well as short-term internet-based lenders.
Following a housing boom, many consumers will become asset rich but are now fast becoming cash poor. On the back of their capital gain, consumers have borrowed against their equity to fund a lifestyle beyond their means. Still, a significant number of Bankrupts are reporting excess use of credit facilities as the main reason for their financial position.
Listed below are typical symptoms of easy credit fatigue: –
• Transferring credit card balances to other credit cards, without cancelling each card;
• Refinancing short-term debt with other short-term debt;
• Mortgage payments exceeding 30% of gross income;
• Constantly increasing the limits on credit facilities in order to pay for necessities;
• Paying interest only;
• Entering into informal payment arrangements with several credit providers;
So, how do you ride this wave without toppling over the crest into higher debt? Or dumped into the bubbling ocean of personal insolvency?
Debt management is the key to navigating the easy credit wave. There are a number of agencies who can provide free financial counseling and support for people in financial distress. These agencies can either be government and community based.
If you feel as though you can relate to any or many of the above symptoms, it might be time for you to consider seeking some advice. That is where the above agencies can help.
If you are still unsure or would like further assistance and details, feel free to contact this Office, or click on the links section on our website for further contact information.
Gavin is an Associate and the Director of Insolvency at Condon Advisory Group. He has over 15 years of experience in all aspects of Personal and Corporate Insolvency. Gavin is also currently the Secretary of Penrith Chamber of Commerce.