A credit-funded Christmas has pushed millions of Aussies into debt, according to new research by Finder.
The Finder survey of 1,086 respondents revealed almost half (49 per cent) of Australians – equivalent to 9.8 million people – racked up Christmas debt.
The research found one in three (36 per cent) would take up to five months to pay off their festive debt, while 8 per cent would take at least six months or more. A further 4 per cent – equivalent to more than 800,000 people – said it would take them 12 months or more to settle.
Millennials went on the biggest spending spree, with two in three (71 per cent) accumulating debt, compared to Gen X (39 per cent).
Finder credit card expert Amy Bradney-George said it was supposed to be the most wonderful time of the year but, for many Australians, the holiday season could also be a source of financial stress.
“The expectations around buying gifts for loved ones, travelling to see family and other holiday activities can lead to overspending and more reliance on credit,” Bradney-George said.
“With the added financial strain from the rising cost of living, many people are finding it harder to stay within their budget and avoid falling into debt.”
Bradney-George said making a solid budget you could actually stick to was key to eliminating holiday-season debt.
“A budget helps you take stock of the money that’s coming in and going out. Seeing your income, expenses and debts in one place can also help you prioritise your financial goals and avoid overspending,” she said.
“Look for ways to trim your spending on things like dining out, entertainment, and unnecessary purchases. Consider setting a spending limit for yourself and avoiding unnecessary purchases until you've paid off your Christmas debt.”
Men overspent the most, with 55 per cent carrying some level of Christmas debt, compared to 43 per cent of women.
Bradney-George urged those struggling with credit card debt to consider if a balance transfer was right for them.
“You can transfer your existing balance to a new card and get a low or 0 per cent interest rate for an introductory period – some up to 36 months. This helps you save money on interest charges while you pay off the debt,” she said.
“If you’ve got a balance of $5,000 on a regular credit card, you could save more than $2,000 in interest with one of these balance-transfer credit card offers.
“If you're still struggling to manage your Christmas debt, consider seeking the advice of a financial professional. They can help you create a plan to pay off your debt and improve your financial situation.
“You can talk to your bank about financial hardship options, or speak to an independent financial counsellor for free by calling the National Debt Helpline on 1800 007 007.”