Putting stimulus cash towards credit card debts advised

Aussies receiving money as a part of the government's financial stimulus package are advised to use such cash to pay off their credit cards.

In an email sent to its clients, Financial Design for Life recommends that those set to benefit from the forthcoming payment may find that servicing high-interest credit card debts is the best way to get on a firm fiscal footing.

However, Chris Browne, director of the Victoria-based firm, acknowledges that the suggestion of using all the stimulus cash for such a purpose may not be the most popular option for Aussie credit card holders who may want to use the money for more leisurely purposes.

"So we've suggested they use some of it and enjoy it but if you do have credit card debt, make sure you get rid of it because it's a really great way to free up some cashflow," he tells the Financial Standard.

And doing so could be particularly advised as Mr Browne points out nine of out ten of the firm's customers are currently not paying off their credit cards.

In other Australian banking news, finance writer Paul Clitheroe recently told A Current Affair that those looking to use their stimulus cash to pay off credit cards charging between 20 and 30 per cent interest should not view themselves as being "anti-Australian" for wanting to do so.