Few things are harder than admitting you’re struggling with debt, but help is at hand. I recently attended the launch of the National Debt Helpline, a service funded by federal and state governments, which has the potential to turn around the fortunes of Australians weighed down by runaway debt.
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We are collectively carrying more debt than ever before – at a time when wages growth is the slowest in decades. It’s not a great combination.
On top of this, interest rates are at historic lows but it’s unlikely they’ll stay that way forever. If rates start to climb, it’s a fair bet a growing number of households will feel the financial pinch.
The type of debt that tends to land people in financial hot water is ‘have-it-now’ debt. I’m talking about credit cards, store debt and payday loans that let us buy more stuff we often don’t need, and which certainly doesn’t rise in value.
Australians owe a total of $35 billion on their credit cards. The average credit card purchase is $120. So, it only takes a handful of big purchases to rack up a four-figure card balance.
If you feel debt is getting the better of you, it’s worth giving the National Debt Hotline a call on 1800 007 007. Not only is this a free service, you won’t be sold additional loans as a way of paying off your current debts, or be steered towards complex debt arrangements that can seriously tarnish your credit record.
Admitting you’re sinking in debt is never easy but it’s better to take positive action today than allow it to overwhelm you.
Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.
