Are we as a nation addicted to debt? According to all indicators, the answer is an overwhelming "yes". In 2004, Australians had approximately $27.7billion in credit card debt - a staggering amount. However, compare this to the latest Reserve Bank figures of $36 billion and it becomes mind-blowing that we have amassed nearly $10 billion more debt in only four years. On its own, these figures are concerning but when you consider that wages have not increased proportionately the figures alarming. In other words we owe a lot more, but have fewer wages to meet the payments.

Every month we spend around $18.3 billion on credit cards, only repaying $17.8 billion, so it seems pretty clear that this upward trend is set to continue despite the well publicised warnings. Supporting this is the fact that in just four years, the average credit card balance has increased from $2499 in 2004 to a figure of $2999.

With economic storm clouds developing i.e. higher interest rates and inflation, the credit cards we are using are becoming even more expensive and harder to manage. There's no doubt the cost of living has increased with petrol prices, rents / mortgages and basic grocery items all increasing, so with this in mind - you would think that credit card usage would be on the downturn. There are two possible solutions to this quandary; firstly, people are using credit cards to supplement their income or secondly, we are addicted to debt and we cannot stop spending even when times are tougher.

The reality I suspect it's a combination of the two, which either way you look at it is a pretty sad indictment. So in tough times, and with predicted tougher times ahead, how do we change our spending behaviour in order to manage debt better?
The answer is not as simple as tightening our belts - although this is certainly something that should be considered and household budgets and spending plans should be constantly reviewed. With so many credit cards available these days, its important to shop around and find a better deal. There are many websites available where you can compare and contrast different credit card products and it make sense to find the one with the features you expect and cheapest interest rate.

You could consolidate you debt through a personal loan, assuming you meet the lending criteria. By doing this you capture all your unsecured debts under one easy to pay monthly payment. Debt Consolidation loans are an effective tool in managing debt but be warned; ensure you cancel all your credit cards and lines of credit once you've consolidated otherwise you may find yourself with twice the level of debt in 6 months time. Its very common for people to use empty credit cards, only to find themselves with double the debt later on.

If you are financially struggling, and need some guidance it's important to approach a trusted professional. Additionally, it's important to keep the lines of communication open with your creditors and let them know your situation. They may be able to offer you some respite or present you with a suitable arrangement.

The most important thing to do is not panic, there is always a solution.