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Debt disaster: Millions of Australians unable to make credit card repayments

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An alarming number of Australians are falling behind on their credit card repayments, according to new research by Finder.

According to Finder's Credit Card Report 2024, 1 in 8 (13%) Australian credit card holders – equivalent to almost 1.8 million people – have missed a repayment in the past three months.

The research found 8% had missed a credit card repayment by 30 days, while 4% had missed a payment by 60 days.

A worrying 2% of Aussie cardholders had missed a credit card repayment by more than 60 days.

Amy Bradney-George, credit card expert at Finder, said credit card misuse is rife.

"It's so tough right now and strain from the rising cost of living is starting to cause some long term damage to people's finances.

"Missing a payment will usually incur a late fee and interest charges and these costs can quickly add up."

Bradney-George said a missed credit card payment can also hurt your credit score.

"You only have 14 days' grace before it will be recorded on your credit file that your repayment was late.

"Details of the late payment can stay on your credit report for 2 years, and while a single late payment is unlikely to affect your credit score at first, if you continue to not pay it or miss more payments it could have a serious impact.

"This can lead to higher interest rates on loans and make it harder to get approval for a new credit card or loan in the future."

There are currently over 13 million credit cards in Australia, netting a national debt accruing interest of $18.1 billion.

Bradney-George said credit cards can be a great way to manage your budget and earn frequent flyer points, but only when managed properly.

"Ideally, you want to pay off the total amount you owe each time you get a statement.

"If money is tight, you also have the option of paying just the minimum amount listed on your statement. As long as you pay that by the due date, you can avoid late payment fees. But the more you can pay off the balance, the better.

"Many credit cards also offer instalment plans for new purchases or for a part of your balance, which can help space out payments over a structured period of time."

Bradney-George said it's crucial that customers let their lender know if they are going to miss a payment.

"If you are up front, you could get access to hardship arrangements which can give you flexibility around meeting repayments with fewer long term consequences."

Have you missed a credit card repayment in the last 3 months?
Yes, by 30 days8%
Yes, by 60 days4%
Yes, by more than 60 days2%
Source: Finder's Credit Card Report 2024 of 546 credit card holders, January 2024

Discover exactly how the average Australian uses their credit card with Finder's comprehensive guide to credit card statistics.

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