Credit card settlement advice given

Those considering a credit card settlement as a means of getting to grips with their finances should consider such an option cautiously.

Indeed, Money-AU.com points out that with so many people looking to drastically reduce how much they owe, Aussie credit consumers should not automatically think that they will be entitled to a settlement.

The publication points out that they should have a good reason to want to do this - besides simply reducing their debts - such as a loss of earnings or divorce.

Those who are earning enough money to pay off their debts should concentrate on doing this.

Furthermore, Money-AU.com reminds consumers that opting for a debt settlement is likely to damage their credit score and they can expect to be charged interest if they are unable to pay the fee involved in such a monetary move.

People wishing to avoid the damage that a debt settlement can cause may want to look at credit cards offering a 0% 12 month purchase period.

Speaking on 2GB radio, assistant treasurer Chris Bowen claimed those using money from the stimulus payment to pay off credit card debts are "great".