‘Positive’ credit card reforms may not be all they seem, with some changes doing more harm than good and trapping Australians in debt for longer.The average credit card debt now lingers around for an average of 27 years – two years longer than the average in 2012.
Many credit card providers have circumvented the Australian government’s crackdown in 2012 that was partly designed to help consumers pay back their credit card debt quicker.
One of the measures mandated by the government was forcing credit providers to disclose to card owners the estimated amount of time and money it would cost them to pay off their debt if they only paid the minimum amount each month.
Since 2012, credit card providers have dropped the minimum repayment from 2.44 per cent to 2.35 per cent.
Now, as a direct result, the estimated time needed to repay debts has increased from 25 years and 10 months, to 27 years and one month.
The good news is that the average amount each credit card holder has to repay has decreased from three and a half years ago, from $6,629 to $6,591.
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