NSW: Shoppers warned to avoid January credit hangover

AAP General News (Australia)
12-18-2004
NSW: Shoppers warned to avoid January credit hangover

By Krystyna Pollard

SYDNEY, Dec 18 AAP - With Christmas spending already topping $8 billion nationwide,
shoppers have been warned to avoid the January credit hangover and stick to a budget.

Tony Devlin from the Salvation Army's Moneycare program said financial counselling
services across Australia saw thousands of people every year who were struggling because
of debt.

Christmas was particularly difficult because of the pressure to buy and many people
were tempted to turn to credit cards, he said.

"Once you get into that debt spiral it's really hard to get out of it," he told reporters
at Sydney's busy Pitt Street Mall today.

"It might just be a $200 credit card bill or $500 or $1,000 or whatever, but once those
extra fees and charges come in, (and) once you can't pay that you can really get into
that debt spiral.

"In NSW in particular the ramifications of that can be fairly draconian.

"It's not an over-exaggeration to say that down the track people can be facing bankruptcy
... (and) all sorts of debt recovery action."

The Salvos were urging people to stick to a budget over Christmas, Mr Devlin said.

"We're saying be careful. Plan ahead as much as you can," he said.

"You can be a good parent, a good brother or sister, without buying those really lavish
and expensive gifts."

Fair Trading Minister Reba Meagher said Christmas spending this year had topped $8
billion in the first two weeks of December nationwide.

The figure was expected to rise to $22 billion by Christmas, up nearly 30 per cent
on figures from five years ago, she said.

And because of Australia's love affair with credit, the average credit card debt was $2,500.

"If people only pay the minimum repayment, a debt of this size would take nearly 16
years to pay off," Ms Meagher told reporters.

"Credit cards are a trap. If people do need credit they should be looking around for
cheaper forms, and perhaps looking at the options of personal loans.

"Don't buy Christmas presents that you're still paying for at Easter. Avoid the January
credit hangover."

Credit cards should be seen as a last resort, not a first option, she said.

AAP kp/bes

KEYWORD: XMAS CREDIT

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