Australians' credit card behaviour 'does not match knowledge'

Although a significant number of Australians are aware of the charges and conditions attached to their credit cards, they could be doing more to avoid being hit with fees, it has been reported.

In research carried out by CoreData on the behalf of news.com.au, some 43.9 per cent of those questioned claim to know how much interest is attached to their card to the nearest percentage point.

Meanwhile, 55 per cent of respondents know exactly how long the interest free period on their main credit card lasts for, while 44.8 per cent pay their debts off in full each month.

However, the publication reveals that there is a contradiction between credit card knowledge and actual spending behaviour with such products, as the majority say they know the exact fees they will be charged, although around half of borrowers have been fined for making a late payment.

Around one in four, meanwhile, have been charged for not making a large enough payment on their monthly bill.

Consequently, the publication advises those who are looking to get on their financial feet and who are in a significant amount of debt to consider taking advantage of a low-fee or 0% balance transfer. Upon doing so, consumers should make paying off as much debt as they can as quickly as possible their main priority.

"Killer debt must be paid off as soon as possible," says entrepreneur and author Tony Melvin.

He adds that placing cash into saving accounts on a regular basis is key to avoiding money problems.

"To avoid debt, you need to make sure you set aside money for the present and the future," he claims.

Steps being revealing to reduce credit card debts were shown in recent Reserve Bank of Australia figures showing the average outstanding credit card balance dropped by one percentage point over the course of April to stand at $3,080.