Aussies overspending during Christmas facing growing credit card debt

Thousands of Australians who had planned to cut back on their spending over the summer due to the ongoing cost-of-living crisis have found themselves overspending during the festive season, leaving their finances in disarray.

According to brokerage Bell Partners Finance, a recent study from comparison site Finder revealed that 8 per cent of Australians – equivalent to 1.7 million people – are now facing growing credit card debt heading into 2025. The national credit card debt is estimated to total $2.7 billion.

Bell Partners Finance managing director Mark Stevenson said that one way to regain control of finances is through a debt consolidation loan.

“If you have overindulged financially over the festive season and blown out those credit cards, a debt consolidation loan is an effective way to reduce monthly outgoings by rolling things into one monthly repayment against your home loan,” Stevenson said.

He added that consolidating debts could potentially allow Australians to pay off their loans at a lower interest rate. However, he said there are several factors to consider before taking out such a loan.

“As with any loan application, there are many different things to consider but the team at Bell Partners Finance can navigate applicants through all the pros and cons,” Stevenson said.

He also emphasised the importance of checking for additional costs, such as penalties for paying off original loans early, application fees, legal fees, valuation fees, and stamp duty. Some lenders may charge these fees if the new loan is secured against a home or other assets.

“If you secure a debt consolidation loan, make sure you pay off and then get rid of those credit cards,” Stevenson said. “Having a good broker by your side through the entire process of debt consolidation and clearance will help you overcome your difficulties.”

With many Australians struggling to manage their finances post-festive season, experts are encouraging people to take proactive steps in reducing debt and regaining financial stability for the year ahead.

Prior to the end of 2024, Stevenson urged borrowers to seek out interest rate reductions or other financial assistance in their mortgages as the timeline for interest rate cuts is pushed further back.

“There is no danger asking your lender if they can help or engaging an expert finance broker to do it for you,” Stevenson said.

[RELATED: Mortgage holders urged to negotiate better deals this Christmas]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.