When mum or grandma were younger and they wanted a new car, do you know what they did?  They saved up.  When they wanted a new winter coat or a holiday?  They saved up.  Dad didn’t run down to the bank for a loan.  Granddad didn’t whip out his Mastercard.  They saved up.

The age gap between the generation is more than years… it has become an attitude gap.  The newer generations think nothing of putting everything on credit and worrying about it tomorrow. The problem with that philosophy is that tomorrow is here and now we all have to worry.

Credit card debt has spiralled across the nation over the last decade and now with the GFC an unwanted reality, many Australians are finding that they simply cannot meet their credit commitments.

“We have seen a massive increase in the number of enquiries,” says Natalie Levett, Associate Director at Australian Financial Solutions. “The overwhelming majority of people are struggling with credit card debt and other unsecured loans”.

With unemployment rising, job security lower and the threat that “things have to get worse before they can get better” from the Government, it looks like this is a dire situation set to continue and those people struggling with their debts need to get help.

“We can assess your situation over the phone and discuss what options may be available to you,” Natalie says, “don’t do another generation trick of ‘sticking your head in the sand’ because these problems won’t go away if you don’t tackle them head on”.

What the majority of lenders fail to realise is that the customers who have been charged this fee are the same customers who are most in need of the bank’s leniency and assistance.  Many Australians are finding the current GFC hitting them hard and their debts are rising all too quickly without the Banks adding to their problems.

At last one lender, the NAB, has decided to abolish this fee as of October 1^st.  Interestingly, the NAB spokespeople have been adamant that this is a genuine attempt to assist customers and the lost revenue – estimated to be $100 million pa – will not be re-couped in undetected other areas.

If this is so then the NAB deserve to be applauded.  Not only for looking to customers interests above their own bottom line but also because in taking this stance, it is helping to place considerable pressure on the other lenders.

Westpac and ANZ have scrambled to keep up with the fallout from the NAB announcement, belatedly stating their own intention to drop their overdrawn fees down to $9.  Whilst this is a step in the right direction, it still falls short of the NAB’s example of completely eliminating the unwanted fee.

Yes, that’s right, too much credit.  It’s about time that we realised that our amount of credit card and other unsecured debt is just as damaging to our health as cigarettes and alcohol.  The associated stress and worry of interest and repayments are taxing on the readily employed with a reasonable income, not to mention to effects our out-of-control spending has on those recently affected by the GFC. To those Australians who find themselves now unable to meet their credit commitments, this is very much the overconsumption of credit.

It’s all too easy to point the finger at the over-eager banks and lenders for wanting us to spend the money.  We are, after all, asking for the money ourselves and then happily trotting off to spend it.  We must take responsibility for our actions and our over-consumption.

The problem is… what if you can’t?  Many ‘under-employed’ people have lost their well-paying jobs and now find themselves working in whatever capacity they can to keep a roof over their heads and food on the table.  The reduced income however, does not stretch as far as pDebtaying all those loans and credit cards.

“There are other options out there’” Natalie Levett of Australian Financial Solutions is quick to point out, “Most people just aren’t aware that there are alternatives which sit between ‘all OK’ and the last resort of bankruptcy”.

Although the recession has “technically” been avoided, this news will not help those Australians who are still struggling with debt.

Many people still find themselves in jobs which are “at risk” or have been laid off already which means that the stimulus package monies have probably already been spent in the wake of rising household costs, petrol costs and credit commitments.

When it comes down to feeding the family or paying a credit card debt or loan, it is obvious some Australian families are having to make hard choices.  These decisions leave them feeling they have no option left but to file for Bankruptcy, not knowing that there are alternatives to bankruptcy, such as a Debt Agreement or Loan Consolidation.

“Life shouldn’t be a struggle.” says Natalie Levett, Associate Director at Australian Financial Solutions. “There are alternatives out there and people need to be aware that bankruptcy can be avoided as long as you get help sooner rather than later.”

The main causes of personal insolvency were unemployment and excessive use of credit. The vast majority of bankruptcies were non-business-related personal bankruptcies. Credit cards should not be seen as the simple cause of bankruptcies because unemployment or ill-health could contribute to a greater reliance on credit and therefore various reasons for insolvency.

The report showed the occupations most likely to be affected by bankruptcy, debt agreements or personal insolvency were clerical workers, service workers, labourers, and mine workers. Marketing and availability of credit cards leads to people spending more than they can afford. People are sometimes offered more than 10 times the credit they ask for, and then they are encouraged to spend it, or they are sent a pre-approved credit limit increase.

Bear in mind that once you go bankrupt, its very difficult and expensive to undo, and can have long term consequences.

Bankruptcy should always be considered as a last resort – there are other options such as debt agreements, that might be more suitable for you and are worth investigating.  It’s always a good idea to seek professional advice before going down this route.

The Australian Bureau of Statistics reported on the 4th of Feburary, 2009 that in seasonally adjusted terms (not including the impact of the government’s December 2008 ‘Stimulus Package’), all retail industries had a sales increase in December 2008, with Food retailing (+1.4%), Department stores (+8.3%), Clothing and soft good retailing (+5.8%), Household good retailing (+9.9%), Other retailing (+2.6%) and Cafes, restaurants and takeaway food services (+1.7%).

With the impending stimulus packages to be released over the next couple of months, and the government encouraging retail spend, some people may find themselves in a worse of position than before with over spending.

If you’ve recently become one of the many Australians struggling with debt, its important to know what your options are.  If your struggling with credit card debt, the best solution for you may be debt consolidation or loan refinancing.  This brings all your debt repayments under one regular payment, making it much easier for you to manage.  You may even find that you can lower your interest rate or monthly payments.