Ban credit hustling: Plea

By Paul Dunlop
ALARM at the number of families drowning in debt has prompted a Pakenham financial counselor to call for the banning of unsolicited offers of credit.
Kathleen Hosie of the Cardinia Casey Community Health Service said a growing number of residents were in desperate financial trouble.
Their plight was made even worse by the alltoo tempting lure of extra credit offers by lending institutions, she said.
One local man was juggling eight credit cards, three personal loans and a debt that totalled $130,000. He came undone when he had an accident at work.
Another resident, a single mother, was becoming sick from extreme stress as she tried to meet mortgage payments of more than $570 per week.
Ms Hosie said she was seeing around a dozen new clients a month whose personal debts were spiralling out of control.
And that could be just the tip of the iceberg as rising interest rates, high petrol prices and other living costs send more families into financial hell.
“Demand is ever increasing and unfortunately people don’t usually seek our help until they are in crisis,” she said.
“A lot of people are relying on credit to get by and they are being offered higher and higher limits that they really cannot afford,” she said.
Ms Hosie’s concerns have been echoed by other welfare and support organisations who say more and more middleincome earners are seeking help from services traditionally used by ‘poor’ people.
“It doesn’t matter what income people are on if they are living right up to — or beyond — whatever that is. Young families are really struggling. People are overcommitted.
“Society is telling people that it is okay to be in debt, to ‘buy now and pay later’ and unfortunately people who can’t really afford the Great Australian Dream are still trying to have it — and are being encouraged too by lending institutions.”
Mrs Hosie said most of her clients had at least three credit cards and usually a personal loan as well, in most cases on top of their mortgage.
She believed banks and other financial institutions should regularly reassess people’s ability to repay credit cards and other loans rather than simply send offers to extend credit limits in the mail.
“It is far too easy to get credit and it only needs one little thing to go wrong for things to go haywire.
“People use credit cards to pay off other credit cards, then take out loans to pay them off. Some people are even digging into their superannuation, using it for breathing space. It’s only robbing Peter to pay Paul.”
With Christmas fast approaching, Ms Hosie warned residents against bowing to the temptation to spend beyond their means.
“It’s hard to avoid, but it is really not worth the extra headaches.”