Warning over $3,480 debt facing millions of Aussies: ‘No choice'
Millions of Australians are turning to credit cards as high mortgage rates and the rising cost of living make it harder to keep up. Credit card debt has jumped to more than $18 billion, the highest level in nearly four years.
More than one million Australians have maxed out their available credit and opened a second credit card, new Finder research found. The average balance per consumer is now standing at $3,480.
Finder personal finance expert Sarah Megginson told Yahoo Finance living expenses have outstripped earnings and many Aussies were putting the balance on credit cards.
RELATED
Millennial reveals huge money reality facing nearly one million Aussies
Major Coles move to take on Chemist Warehouse, Bunnings, Amazon
Centrelink payment change happening next week: 'Will increase'
'With limited savings to absorb those higher costs, many Australians have had no choice but to take on more credit card debt to manage rising costs,' she said.
Finder's survey of 1,005 respondents found one in four Australians had switched credit cards or added a new credit card over the past year.
One in 10 Aussies did it in pursuit of rewards points, while the same proportion were seeking a lower interest rate. Around 6 per cent had applied for a balance transfer, while 4 per cent were looking for lower transaction fees.
Australia's credit card debt rose to $18.13 billion in March, Reserve Bank of Australia data found, with spending hitting new record highs.
The total value of credit card transactions rose by $382 million or 1 per cent in the month, and $1.2 billion or 4 per cent compared to the same time a year ago.
RBA data shows the average credit card rate over the last 12 months was 18.49 per cent, out of the cards charging interest. That means Australians have paid out nearly $3.3 billion in credit card interest charges in the past year.
Findex financial advisor Jess Bell said credit cards can get a 'bad rap' because people don't understand the rules around them.
'I like to use it for my own cashflow in the way that any direct debits are done on credit cards, so I don't have to think about it,' she told Yahoo Finance.
"At the end of each month or each statement that's due, we pay it off in full. I forecast all my bills for the year with an added 5, 10 per cent buffer for all my expenses.'
She said it was important to have a strategy in place so you can repay your bill each month and avoid paying interest.
'That's where it can be a really good strategy is you don't just spend it on the credit card and not keep putting money away for when the credit card [bill] comes due. That's where people get stuck,' she said.
While credit cards can be a common part of some Aussies' day-to-day money habits, others can find themselves in a 'downward debt spiral' due to some bad mistakes.
Finder previously found 13 per cent of Aussies had fallen behind on repayments, with 8 per cent 30 days late, 4 per cent 60 days late, and 2 per cent more than 60 days behind.
Missed payments will usually incur a late fee and interest charges, which can add up quickly, plus it can have a negative impact on your credit score.
Megginson said it was important for Aussies to review their budgets.
'It's crucial for Australians to review their spending, create a realistic budget, and explore lower-cost credit options,' she said.
'A few smart moves now — like consolidating debt or setting repayment goals — can make a big difference in getting back in control.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bloomberg
23 minutes ago
- Bloomberg
Wealthy Australians Brace for a New Tax on Retirement Savings
Australia is forging ahead with a new tax on its richest retirement savers amid concerns that the country's A$4.1 trillion ($2.7 trillion) pensions system is becoming a high-wealth accumulation vehicle. The Labor government plans to slap an extra 15% levy on profits from pension balances above A$3 million, in a change likely to impact around 80,000 savers. That's on top of the 15% tax that they — and most Australian workers — already typically pay on investment earnings in their superannuation accounts.
Yahoo
an hour ago
- Yahoo
$100 million Powerball win sparks ATO, Centrelink warning for every Aussie: 'Trap'
Australians are being warned about the potential implications of winning the lottery following last night's $100 million Powerball draw. It was the biggest Powerball jackpot of 2025, and one lucky person walked away as the sole jackpot winner. However, there are a few stipulations worth considering as we get close to tax time and how a massive sum of cash like this can affect you. The Australian Taxation Office (ATO) had some handy advice. "You don't need to declare your winnings to us, and you won't pay tax on them," the tax office said. RELATED Major lottery warning after Aussie winners reveal what they spent their money on Centrelink cash boost coming from July 1 for millions of Aussies Aussie teen's job paying $300 per hour without a uni degree "But, any interest earned on the winnings will need to be included in your assessable income." If you were the sole winner of the jackpot and had it sitting in a savings account with a 5 per cent interest rate, you would generate around $5 million in just one year. Come tax time next year, you would have to pay tax on that immense amount of money. First Financial's James Wrigley told Yahoo Finance you should seek out advice from professionals if you win big as they can guide you into divvying up the money wisely before you spend it Australia doesn't always count lottery wins in its income assessment. This is because it assesses what you might earn on a regular basis and hitting the jackpot is stored under the "unlikely to happen again" and "hard to predict" categories. It's also because the money wasn't from "a service or work provided". But it depends on how you accept the payment. Lottery winners can usually either get it as a lump sum payment, or they can choose to have it spread out in regular payment intervals over several years. Services Australia will treat it as part of the income assessment if you pick the latter option because then it would be regular income, and that could drastically reduce how much Centrelink you receive. That's what happened to South Australian resident Frank Kemmler, who was kicked off his disability support pension after winning a $60,000 lotto prize. While he was stoked at the sudden influx of cash, he claimed he wasn't given an option between the lump sum or regular payments. The Adelaide man had to foot the bill for GP appointments and medication that was previously paid for by his pension. "I'm just trying to stop other people from falling into the same trap,' he told A Current Affair. 'These people that are buying these [lottery] tickets, there's no warning anywhere … to say that you're going to lose your pension. Centrelink recipients have been urged to tell Services Australia as soon as possible about their new financial situation. Even if you take a lump sum payment, your payments could still be affected. Depending on how much you win, the government body will include your lottery earnings as part of your asset test. If it's over a certain amount, combined with your other assets, your payments could be reduced or switched off. The winning numbers in Powerball draw 1517 on Thursday, 12 12 were 28, 10, 3, 16, 31, 14 and 21. The all-important Powerball number was 6. The person who won the entire $100 million jackpot purchased their ticket in Sydney's eastern suburbs. There were also six division two winners, who scored $282,415.55 each. In addition to them, there were 3,056,245 wins across divisions two to nine in the draw, and they have shared in more than $60.9 million of prize money. That's an average win of $19 each. Half of all Australian adults were expected to have bought a ticket for the megadraw. More than 10 million people bought a ticket for the last $100 million draw in November last year. If you didn't win, rest assured that scoring the grand prize has odds of one to 134 in to access your portfolio
Yahoo
an hour ago
- Yahoo
People From 44 Different Professions Shared Their Salaries To The Digit, And I'm Digging The Transparency
Recently, I asked members of the BuzzFeed Community to share their salaries and what they do if they were comfortable doing so. Here are 44 different professionals from all across the board and how much they make, and where they're located. 1."$110,000 — HR for an NYC-based real estate brokerage." —34, NJ 2."I make $76K a year as a children's librarian." —33, No location 3."I'm an accountant for a large company making about $70K, and I've been there one year." —25, No location 4."$132,000 — Elementary principal." —54, Utah 5."Carpenter — $136K." —Anonymous 6."$110,000+ a year. Flight attendant for one of the big three US carriers. Been flying for 11 years." —37, Chicago 7."Surgeon, sub-specialized, make $700K per year entirely production-based working 50–55 hours/week." —42, Seattle 8."$164,000 plus profit-sharing as the director of digital marketing and customer data for a national CPG brand." —46, NH 9."Project Manager, base salary plus bonus — $185K." —48, NY 10."$118K per year working nine days per fortnight as a Clinical Manager for a not-for-profit. I'm a mental health social worker." —40, Australia 11."$110,000 Instructional Designer with MA Ed and 30+ years in corporate training." —68, TX 12."$166K as a Senior Network Install Analyst." —42, CO 13."$105K — mobile radiographer. I take X-rays with a portable machine in people's homes and small hospitals." —47, AZ 14."$127K as a teacher of 26 years." —58, Chicago 15."$160,000 a year as a truck driver, quit school in Grade 9." —59, Alberta, Canada 16."$200,000 — Aerospace Sourcing Manager." —57, CA 17."I make $140K as a parcel consultant." —41, AK 18."$135K — UPS driver." —34, CO 19."I am a freelance television cameraman covering sporting events around the world, working part-time, I easily make over 100K." —60, Detroit, MI 20."Union Electrician, no college, $120K–$140K." —37, OR 21."I have a 35-year career in real estate, and my average income is $120,000." —76, AZ 22."System architect for a late-stage startup. Salary is $235K, and I get around $200K in bonuses each year." —41, Atlanta 23."Trial attorney working for the government, $104K." —41, PA 24."Boutique Fitness Manager — $130K." —Anonymous 25."IT assistant for a public school, $23K at entry-level pay." —25, TX 26."Environmental consultant — $80,000/year." —26, PA 27."Radiologic Technologist (X-ray & CT cert) for seven years. $135,000 per year." —51, CA 28."Data Analyst, $145K." —33, NYC 29."$120K. A&P aircraft mechanic." —40, OK 30."$103K with a bachelor's degree and an HR certification." —31, PA 31."Attorney at a virtual firm. $150K with additional bonuses between $40K–$100K." —60, TX 32."Environmental permitting and regulatory specialist — $135K." —35, Chicago 33."$190K (base salary plus bonus) as a computer security architect." —63, FL 34."$108,000, Special Education teacher, which doesn't go far in an HCOL area like the Bay Area." —39, San Francisco 35."Telephone lineman, base $110,000 per year, not salary." —49, OH 36."I make $132K as an ER pharmacist in a relatively LCOL area." —33, No location 37."$143K. Over 29 years as a forensic scientist, working my way up to middle management." —55, MD 38."Senior Cybersecurity Engineer — $180,000/year." —36, VA 39."Family law and criminal defense attorney. I make $250,000 per took 25 years to get to this point." —56, OH 40."Public Works inspector — $80,000 a year." —61, CA 41."$310,000. Occupational Medicine doctor." —51, IN 42."Fire Lieutenant/Paramedic-Critical Care. $110K with 23 years on the department." —46, WI 43."Supervisor of a pathology lab at a top-10 medical center. $185,000." —70, CA "Clinical pharmacist with 30 years of experience. $158,000/year. I work in a hospital outpatient setting." —56, NC Want to share how much you make? Tell us in the comments below or completely anonymously in this Google form!
