I know firsthand how much a woman loves to shop because I get so much therapy from spending my hard-earned money on whatever I want. I even love doing the weekly food shopping; there's no better reward than to treat your family with fresh produce and some tasty treats too. But it still surprised me when I recently read we're spending now more than ever.
The latest Australian Bureau of Statistics (ABS) data has revealed that retail sales have jumped up by 0.3 percent seasonally adjusted in March compared to February. And it was the sixth consecutive quarter of positive trend growth in volume terms.
Clothing, footwear and other personal accessories had one of the larger increases for the quarter at 0.9 percent, the ABS said, so it's likely that we ladies may have had something to do with these results.
What is most surprising about this shopping trend is the fact that our mortgages have been eating away at most Australian's disposable incomes and shopping budgets, with six rate rises in eight months by the Reserve Bank of Australia. But we haven't stopped shopping, in fact these figures show we haven't slowed down either!
So does this mean that we are spending away our savings or are we taking advantage of our credit cards? Either way it's bad news for most of us with a home loan, because interest rates are not expected to drop any time soon and are more likely to keep rising.
For instance, an average $300,000 variable home loan has increased by $300 per month in repayments since September 2009 before rates began to rise. The average standard variable rate now up to just over 7 percent and the benchmark rate (the average of the major four banks) is up to 7.38 percent.
Credit cards move differently to variable home loan rates and always charge more interest because they are not securitised. This means if you don't make your repayments your credit card provider won't take your new pair of platform pumps off you like they will take your home if you default on your mortgage.
This is why it's so important to keep track of your spending during this cycle of interest rate rises and especially with your debts so compare credit cards to make sure you're getting a good deal. Interest rates for credit cards are also likely to rise following the latest cash rate increases, so make sure you pay off your debts before the next wave hits.
If you have more than one credit card debt, think about combining them with a low-rate balance transfer card because there are some great deals out there. For instance, HSBC is offering 0 percent for six months and St George and Bank SA are offering 0.99 percent for six months.
These can really get you out of the red without paying any interest if you use them wisely. Just make sure you check the terms and conditions because some may charge a high rate for purchases.
Your say: Do you think you or someone you know is addicted to spending? How to you keep your credit card in check? Share with us below.
Michelle Hutchison is Consumer Advocate at RateCity.
The above information is general only and does not take into account your objectives, financial situation or needs.
Related video In a recent ANZ study, one third of Australian women admitted to having less than $1000 of savings in their bank accounts, and they're fuelling our economy's credit card debt.
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