Credit cards bad for health

Over the past year, household debt in Australia has doubled and credit card debt has tripled, with Australians' total debts now topping $400 billion. Of this, $20.3 billion is outstanding credit card debt, with the average Australian now owing $5,000 on each card. There are almost 10 million cards on issue, according to the Reserve Bank, and many cardholders do not pay off the balances at the end of each month. A Sydney psychologist says that these people have gone into “debt denial” in order to cope. We could be heading into a crisis, Daniela Intili says, because we're just sweeping money problems under the carpet.

She recommends that people create realistic budgets for themselves and stick to them. We have become an easy credit society, she says, and card debt mounts up because you don't feel the pain immediately. Her own strategy has been to put away her credit cards and use cash. A good way to reduce credit card use is to put them into a cup of water and freeze them, Ms Intili says, as there's something wonderfully symbolic about that.