When debt is easy to bank up - The Age - Daniella Miletic
Facing bankruptcy: Robert Tranter is in enormous debt yet kept getting approval for more credit cards and loans. Photo: Angela Wylie
LOOKING back, Robert Tranter can't quite believe that he was ever allowed to borrow so much money.
At 27, he has two car loans, a loan for a motorcycle, Centrelink
debt and two outstanding credit cards. To add to the financial
burden, Mr Tranter has also
accumulated more than $5000 worth of car-related fines.
Mr Tranter, who earns
$670 a week after tax as a bus driver, says his application for
a credit card was approved in April this year despite having a
blemished credit history
and falling behind in repayments for existing debts. He applied
for the (second) credit card online and spent the entire $2000
limit "on rubbish" shortly after receiving it.
Since then, he has struggled to make the monthly repayments on
his card which, he says, has an interest rate of about 18%.
"I feel resentful to the
people that gave me the loans … I don't know how I got them.
With my previous credit history I don't know how I got
approved," he says.
Mr Tranter has contacted Financial Counselling for help and is
planning on filing for bankruptcy. The debt, he says, has become
too much to bear.
"It's the end for me, I can't do it," he says. "It (bankruptcy)
is a relief because it will stop these arguments with creditors
and these annoying phone calls
and it will just make my life a little bit easier."
Jill Com, of Financial Counselling, says clients are feeling
increasingly anxious about their credit card circumstances. Many
have overloaded credit cards that they
have used to keep up with essential household expenses.
Ms Com says it is "far far too easy" to get credit cards. "And
unless those payments are made on time and regularly the higher
the interest is and it just gets out of control," she says.
"The interest rates are too high for people on low incomes, and
people who use those cards just to make ends meet, they are
never going to catch up."
Deborah Southon, of Fox Symes and Associates, a debt relief organisation, said an increasing number of consumers have contacted them about credit card debt since July.
In its annual report, tabled in Parliament yesterday, Consumer Affairs Victoria said there was a 33% increase in calls to their credit and debt line compared with last year.
In the report, credit card debt is listed as a major concern among consumers. Of the record 11,842 calls made to the department's debt line, almost 700 were about credit cards.