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Household debt hits $101 billion

Research conducted by debt comparison website finder.com.au has found that Australian credit card debt and personal loans has reached $101.4 billion as of December 2014.

In a statement issued by finder.com.au, it said this was the highest level of combined personal loans and credit card debt since October 2011.

“The highest level of household credit card and personal loan debt recorded was in May 2008, with over $112.6 billion,” a statement from finder.com.au said.

“Personal loans are more popular than credit cards, with $59.6 billion of personal loan debt held by households compared to $41.8 billion in credit card debt outstanding.

“Personal loan debt has also grown by 2.21 per cent over the past year (December 2013 – December 2014), while credit card debt has increased by less than 1 percent (0.72 per cent),” the statement said.

Finder.com.au money expert Michelle Hutchison said the debate for Australians to put debt on a credit card or personal loan is a “common financial hurdle” this time of year.

“Australian households are often struggling with expenses at this time of year, following an over-spending period over summer,” Ms Hutchison said.

“The best way to finance unexpected expenses or unmanageable debt takes careful consideration so that you don’t end up struggling even more down the track.

“It really depends on what you need the money for, your credit profile and your ability to pay it back over a set period of time,” she said.