Australians are addicted to credit?

You know this is an interesting question because there are many different ways to think about it. In addition to many different debts, such as credit cards, mortgages, personal loans, without interest. But I just wanted to look at one product. Credit cards, we are increasingly in debt on our cards?

At the midpoint of 1997, we as a country owe $ 7.1 billion cards. For half of 2011, owe $ 51 billion. OK, this is not a small jump, which is an amazing leap. So you might think, they are increasingly in debt during this period of 14 years. However, one must take into account inflation and population growth.

Looking at the RBA website, we can work between 1997 and 2011 there has been an annual increase of inflation at 2.8 per year. Searching the Internet, I can not find in 1997 there were 18.5 million people, however there are now 22.6 million people.

So let's work with some figures. We can start by dividing $ 7,100,000,000 debt 1997 uniformly by 18.5 million people. This means that at the midpoint in 1997, every man, woman and child in Australia is $ 383 dollars.

Now we can do the same this year. We begin by dividing the $ 51 billion by 22.6 million people. Now we find that every man, woman and child owes $ 3551. OK, this is a big difference.

But I hear you say prices have risen. $ 383 in 1997 would buy more than $ 383 today. You're right! In fact, a basket of goods in 1997 amounted to $ 383 would cost $ 550 in today's money. This is a long way from the amount of $ 3551.

In fact we have about 6.4 times for every man, woman and child in what we had in 1997. This is real money inflation and population adjusted terms. Why is this? We are struggling to pay our monthly bills and make a difference with credit cards. Or are we running our cards, as our genius, bills running to the left right and center.

Whatever the case may be, is a real eye opener! We have been increasing our credit card spend each year by year. We have added an average of 17.1% per man, woman and child in our national bill of credit cards over 14 years. Remember, inflation has risen items only 2.8 percent per year every year. Thus, in inflation adjusted terms, the 14.3% each year.

*** The following story may have to read a couple of times for it to sink in. However, please, as this is a good shot to show the growth of credit cards the total market. ***

Now just to prove my point that Australians are addicted to credit, let's use an analogy of a milkman, but the use of figures from the credit card market.

The milkman is working in a town called Cowtown and supplies 100% of its milk. In this city in 1997 was 1850 people. Each person who buys milk for a year for $ 100. In 1997 a profit $ 185,000 of his campaign of milk.

Every year the cost of milk by 17.1% to 2011. As he is the only supply of milk in the city, no choice but to get your milk from it. Also on average, the city grows in population every year at 1.45 percent, to 2,260 in 2011.

Do you know how much they earn in 2011? How about $ 2,062,882. Only with an overall growth rate of little people and a large increase in milk prices, their profits are soaring. To put this in perspective, even in inflation-adjusted terms would be worth $ 1,435,000 in 1997. This is 7.7 times your salary 1997.

But Australians do not live in Cowtown. However, we have increased our total lending by this amount each year. Can you see how Australia can really be 100 percent addicted to debt? Can you see why banks love customers to have a credit card? Why do banks increase their limit to the drop of a hat? And why the banks want you to take as long as possible to pay your card.

Please wake up Australia. We're speculation death in the cards. We need new laws that essentially protect us from ourselves.

PS if this increase in dairy prices continues and the city continues to grow at the same rate for five years, in 2016 will win $ 4,879,308.

My name is Adam Goulding and my story is quite simple. Six years ago my bank balance was so low the rent was a big problem.

Then, like lightning, a thought so extremely simple, however, a powerful realization hit me. What has happened in my life with the money until the March 15, 2005 was not working!