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The worrying new trend when it comes to credit card debt

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Only half of us would be able to dip into personal savings if we found ourselves swimming in credit card debt, research by Finder shows.

The survey of 825 credit card holders found that, when confronted by credit card debt, 18% of people would turn to a loved one while 19% would contact the bank.

"Pre-coronavirus, paying off a manageable amount of credit card debt was straightforward," says Kate Browne from Finder.

new trend credit card debt balance

"Now, it only takes a job loss or an unexpected expense to go from paying off debt comfortably to struggling to keep up with bills," she said.

Worryingly, the research also found that 6% of people would choose to simply miss the next repayment, while 3% would take out a personal loan. Men have their heads further in the sand than women, it seems - they're twice as likely as women to skip repayments.

Debt is not a national strong suit, Australians have a lot of it. According to the Reserve Bank of Australia, that debt includes $39 billion owed to credit card providers.

Browne stresses how important it is to contact your card provider if you find yourself in danger of missing a repayment.

"You'll have more options if the bank sees you are being proactive in trying to solve a debt problem ahead of time," she said.

"If you have missed a payment, you can get a free copy of your credit report through Finder and see if it has had an impact on your credit score."

You can get a free copy from one of the three credit reporting agencies - Equifax, illion or Experian.

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David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
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