Everyone is familiar with consumer warnings on products. You know that cigarettes are deadly, alcohol is dangerous and if youre allergic to peanuts, you need to keep a close eye on food product labels.

Imagine if your Westpac credit card came with a warningusing this card can be extremely harmful to your finances. It may sound like a joke, but in the UK credit card warnings may not be too far from the truth. The British government has previously proposed that its Consumer Credit Act be updated with a requirement for lenders to warn consumers of the dangers of making only the minimum monthly payment on their credit card.

Back in Australia, this kind of legal requirement would be useful in helping to raise awareness of the dangers of making just the minimum monthly repayment. We owe millions on our collective credit cards and, while this works brilliantly for increasing the amount of profits made by banks such as Westpac, it is creating a nation-wide spiral of debt.

Next time you receive your Westpac credit card statement, look at the minimum amount payable. Paying back this amount may get your credit card bill out of your mind for the next month, but it means you will be holding onto your debt for much longer than you should.

If you owe even a few hundred dollars on your Westpac credit card, making the minimum monthly payment will cover the interest but will barelyif at all touch the principal of your debt. Add in the Westpac fees and charges you meet along the way and you could easily find your credit card debt increasing as you make the minimum repayment amount.

Credit cards, such as the range of products provided by westpac, generally attract a much higher rate of interest than other types of credit, such as home loans. As you are likely to owe much more on your home loan debt and will need to look at debt consolidation loans, like many people, you may try to put any extra money towards your mortgage repayments. If you have a credit card debt, you should work towards clearing this first, through making higher repayments or consolidating your debts. The money you will save over time on Westpac credit card interest can be put towards your home loan and used to build your wealth, rather than dissolve your funds and contribute to the bank profits.