Christmas debt looms as gift that keeps on giving

AUSTRALIANS are expected to spend about $8.5 billion on Christmas presents this festive season, with almost a third admitting to feeling pressured to spend more than they can afford, a survey says.

A report from financial comparison company RateCity found each Australian adult planned to spend $511 on average during Christmas. More than half - or 51 per cent of 1000 respondents - said they were going to pay for their gifts using credit cards, the report said.

RateCity spokeswoman Michelle Hutchison said those giving the plastic a workout before the holiday period should be aware of the high interest rates on many credit cards. ''Australians need to be careful with using credit cards to pay for Christmas presents because if you're not prepared for how to pay back the debt, it could cost significantly more than planned,'' Ms Hutchison said.

''Christmas shopping can ruin your financial outcomes for the following year.''

Of those using credit cards, 81 per cent of respondents said they would pay off the balance during the interest-free period.

At the other end of the scale, 11 per cent said they intended to make just the minimum repayment while 6 per cent said they ''don't know how they will pay back their credit card debt''.



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