A third of Aussies defeated by debt

One third (31 per cent) of Aussies confess poor financial management, such as using cash advances on credit cards, not knowing how to budget, not paying attention to debt, and racking up late fees on credit facilities are contributing to their personal debt situation.

Men are more likely than women to have not paid attention to their debt, with credit late fees contributing to their debt situation.

Research based on a survey of 1065 Australians conducted by Lonergan Research on behalf of Tribeca Financial found that 44 per cent of respondents have created debt with indiscriminate, everyday purchases such as ordering takeaway food, their Uber Eats home delivery habit and eating out.

More than half (54 per cent) of respondents identified holiday spending, education costs, updating homewares and furniture, and ‘big ticket’ purchases as culprits for spiralling debt. 

Tribeca Financial chief executive Ryan Watson said it was concerning that so many Australians admitted that they were drowning in debt.

“It is alarming for people to get into credit debt over insignificant purchases like takeaway food and Uber Eats,” Mr Watson said.

“The debt mounts up, leading to Aussies managing debt with high-interest rates. It is concerning, and it’s causing financial stress for two in five Australians.”

The research shows nearly nine million Australians are aware of their own credit mismanagement, and two thirds of this group (63 per cent or 5.4 million Aussies) have experienced issues repaying credit debt.  

Almost half (48 per cent) of Australians who are aware they have mismanaged their credit, have maxed out their credit card, gone over their spending limit, continued to make purchases with Buy Now Pay Later (BNPL) services, or have purposely made purchases late at night to rort the credit card approval system.

“I am consistently disappointed by lenders who act in their own best interests, often with no consideration of an individual’s ability to manage debt,” Mr Watson said. 

“Our research found almost nine in 10 Australians have been subject to additional charges relating to their credit card.”

Mr Watson is leading a campaign called The Great Aussie Credit Crush, which aims to encourage 100,000 Australians to destroy their credit card and pledge their commitment to paying off debt by 31 December 2019.

Does your financial situation cause you undue stress? Would you consider destroying your credit card?

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Written by Ben

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