TREASURER Wayne Swan's efforts to control inflation are under threat from Australia's love affair with the credit card.A Herald Sun analysis of Reserve Bank data shows if credit card debt keeps growing at the monthly average of 0.88 per cent, it will hit $46.6 billion by year's end.Figures on credit card debt levels from the Christmas/New Year period are not available, but the debt for 2007 is likely to be more than $42 billion.Consumer Action Law Centre spokesman Gerard Brody said rising credit card debts were a concern because many people struggled to pay them.
Financial institutions should carry out better checks on people applying for higher credit limits, Mr Brody said.

"When people apply for a new card there are certain procedures that are gone though, such as checks on their income and debts.

"Often when it comes to increasing limits, people aren't subject to the same rigour in credit assessment.''

Mr Brody said customers who were unlikely to pay off credit purchases within the interest-free period should be wary of store cards and look for credit cards with the lowest interest rates and fees.

CommSec chief economist Craig James said most credit card users were responsible and the growth in debt appeared to be sustainable.

Mr James said Australians needed to watch their debt levels closely this year because of higher living costs and the prospect of the Reserve Bank lifting official interest rates.

"People will need to be a bit more careful about keeping debt under control . . .'' he said.

"I think consumers will continue to walk down the path of economic responsibility or conservatism in 2008.''

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