Bad financial habits sending Aussies broke and making them stressed

Emma Duffy By on July 15, 2019
 
credit card debt

Photo by Gratisography from Pexels

Australia’s addiction to Afterpay and Uber Eats is hitting our hip pockets hard and sending us spiralling into debt, according to new research.

A survey commissioned by Tribeca Financial found over 44% of Australians admitted to creating debt with indiscriminate, everyday purchases such as ordering takeaway food and eating out.

More than half (54%) of those surveyed said holiday spending, education costs, updating homewares and furniture, and ‘big ticket’ purchases were to blame for their for spiralling debt.

Tribeca Financial’s CEO, Ryan Watson said he is disillusioned about people getting themselves into debt and their admittance to drowning in debt.

“It is alarming for people to get into credit card debt over insignificant purchases like takeaway food and Uber Eats. The debt mounts up, leading to Aussies managing debt with high interest rates,” Mr Watson said.

“It is concerning, and it’s causing financial stress for two in five Australians.”

One third (31%) of Aussies confessed to 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 cards.

The research shows nearly nine million Australians are aware of their own credit mismanagement, with two-thirds of this group admitting to experiencing issues with repaying credit card debt.

Nearly half (48%) of Australians who are aware of their credit mismanagement said they have maxed out their credit card, gone over their spending limit, continued to make purchases with buy now, pay later services, or have purposely made purchases late at night in an attempt 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. Our research found almost nine in 10 Australians have been subject to additional charges relating to their credit card,” Mr Watson said.

But he says the blame can’t all be laid on credit card providers.

“It seems Aussies are knowingly getting themselves into debt, and banks and financial providers are benefitting as a result.”

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Emma Duffy
Emma Duffy joined Savings.com.au as a Finance Journalist in 2019 after spending a year as the editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of women and millennials by writing about complex financial topics (what's an ETF I hear you ask?) in a way that's easy for the average Joe (or Jill) to understand.

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