Credit card payments are "worst bad debt"

The "worst bad debt" someone can have is on a credit card, one writer has said.

Having credit card money issues is the "worst bad debt" that a person can have, according to one writer.

The Australian's Gillian Bullock points out that with some banks charging up to 20 per cent for a full rewards card, it is not worth generating large payments on credit cards.

She noted even a small amount could be "too much", however many Australians have realised it is not worth it to pay over the odds on Aussie credit, which has led to an increase in the amount of debit cards beings used.

Ms Bullock said: "If you are faced with too much credit card debt, then consolidate."

There are some who are at "breaking point" due to rising rates, but there is such thing as good debt whereby people borrow to make money through investment.

Lesley Parker, writing for Business Day, suggested people should reduce their credit card debt if they want to gain more of a chance of being granted a home loan approval.

By Bret Clement