Australians are paying fixed expenses including rent and bills on credit cards

DESPERATE Australians are resorting to paying their rent and bills using credit as they battle the rising cost of living.

EXCLUSIVE

DESPERATE Australians are resorting to paying their rent and bills using credit as they battle the rising cost of living.

While consumers have entered 2018 with a massive $51.2 billion in credit card debt — of which $31.6 billion is accruing interest — alarming new findings from financial comparison site Mozo reveal one in six Australians are paying for essentials on plastic.

It could be time to think about alternative payment methods. Picture: iStock.

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Consumers admit relying on credit cards is their worst financial habit, with 24 per cent saying they use money they don’t have to pay for things, while 22 per cent conceded they have no cash reserves at all stashed away for an emergency situation.

Mozo spokeswoman Kirsty Lamont said the nation’s reliance on plastic was a “concerning trend” as debt levels remain so high.

Mozo spokeswoman Kirsty Lamont said the nation is to reliant on credit cards.

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“The cost of living has increased pretty sharply for many households across Australia in recent years,’’ she said.

“We are seeing some concerning trends where more people were paying for bills and household expenses using a credit card.”

She warned of the financial woes consumers can quickly run into by relying on credit cards to pay for everyday expenses.

Racking up debt on credit cards can be expensive with the average interest rate around 17 per cent.

Reserve Bank of Australia data shows there are more than 16.7 million credit cards in circulation.

Mozo data shows the average credit card interest rate is around 17 per cent and Ms Lamont said switching to a low-rate credit card was a simple way to reduce monthly interest charges on unpaid debts.

Financial Counselling Australia’s executive director Fiona Guthrie said putting fixed expenses on credit is a “real worry.”

Financial Counselling Australia’s Fiona Guthrie warns people to be careful racking up card debt.

“Credit cards can be quite a dangerous product because they are hard to keep track; you make lots of small purchases over a long time and you get a bill once a month,’’ she said.

“Unless you are tracking it regularly that debt creeps up and that’s why two thirds of people don’t pay back the full balance, which is a large number of people.”

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