When do Australians start to stress about credit card debt?

Sally McMullen 21 February 2017

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Most credit card holders don’t start to panic until their debt reaches more than $4,100, a new study reveals.

Nobody likes collecting debt, but when do Australians start to really worry about their credit card balances? According to a recent study by finder.com.au, the average Aussie only starts to stress about their credit card debt when it hits $4,113.

This is worrying, as Australian credit card holders have an average credit card balance of $3,149, with an average of $1,933 collecting interest. If your debt is collecting a standard interest rate, even a balance as low as a couple of hundred of dollars can quickly grow into an unmanageable amount. And if Australians are only starting to think about their debt once it hits over $4,000, it’s going to become more difficult for the average Aussie to get this debt under control.

Overall, women are more likely to stress about credit card debt sooner than men. Men typically become worried when their debt reaches $4,999, while women become uneasy once their balance hits the $3,605 mark.

From a nationwide perspective, residents in the Northern Territory are the biggest worrywarts, starting to stress about credit card debt when it reaches $1,792 on average. Meanwhile, Western Australians are the most relaxed and only start to worry when their credit card debt reaches a much higher $4,475.

Average credit card debt that makes Australians worry

State/TerritoryCredit card debt
ACT$3,477
NSW$4,323
NT$1,792
QLD$4,232
SA$3,349
TAS$3,157
VIC$4,084
WA$4,475

So, what can Australians do to help alleviate credit card debt-related stress? If you want to repay your debt, you should try to clear your balance in full each month. When you do this, most cards will also reward you with a period of interest-free days on future purchases.

However, if you’re struggling to repay your debt in full due to high interest and a growing balance, it might be time to consider a 0% balance transfer credit card. At finder, we compare credit cards with interest-free balance transfer promotional periods of between 12 and 24 months. This will help you repay your balance faster without accruing any additional interest charges.

So, let’s say you have a credit card carrying a debt of $4,113. If you were to get a balance transfer credit card with 0% interest for 12 months, you’d need to repay $342.75 each month to clear the balance before the interest-free promotion ended and the debt continued to collect interest. With a 0% interest for 24 months offer, you’d have longer to repay the debt and would only have to allocate $171.40 each month to clear the entire debt over the two years.

Whether your debt is higher or lower than $4,113, if you’re starting to feel stressed about your growing credit card balance, there are plenty of ways to get your finances under control. See our guide on how to reduce your credit card debt for more tips.

Picture: Shutterstock

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