Many Australians will rely on credit cards this Christmas to get through costs of festive season
More Australians are relying heavily on credit cards to get through Christmas, as experts advise how they can avoid a ‘graveyard’ month of debt.
Retail
Don't miss out on the headlines from Retail. Followed categories will be added to My News.
Exclusive: Struggling Australians are relying more heavily on credit cards to battle their way through Christmas and many have failed to save money ahead of the most expensive time of year.
Consumers have blamed rising power costs, upcoming holiday expenses and school fees for the financial strain put on them over the coming months, new St George Bank data shows.
Just three weeks remain until Christmas and many people have left it late to start tucking away cash.
MORE: Barefoot Investor's top Christmas spending tips
MORE: Dangers of buy now, pay later schemes
About 46 per cent of people have failed to stash away money for the festive period and 30 per cent said they would turn to credit to survive.
But despite this St George Bank’s general manager Ross Miller said Australians were becoming “more conscious of what they spend”.
“People are saying Christmas isn’t just about presents and eating, they want to spend money on holidays and quality of life,” he said.
“Four in 10 Australians have a savings plan this year whereas last year it was only two in 10.”
But for those who are ill-prepared Mr Miller urged them to be honest about how much they actually needed to spend and not go overboard.
The research, which quizzed 1000 Australians, also found men (38 per cent) were more likely to be reliant on credit cards than women (23 per cent).
Credit cards often have interest rates of more than 20 per cent, hitting consumers hard if they failed to pay off their balances in full each month.
Australia’s largest debt collection agency Prushka’s chief executive officer Roger Mendelson warned Australians who bury their heads in the sand now that they often end up paying the price in March which he dubbed the “graveyard month”.
“March is when it starts to hit when you can’t keep deferring payments,” he said.
“People get more money before Christmas than they’ve had all year because they get holiday pay,” he said.
“You should never spend on a credit card if you can’t pay it off by the end of the month, that’s the biggest mistake people make.”
SPENDING TIPS
— Don’t forget about your normal costs outside of Christmas.
— Have spending parameters with family and friends around presents.
— Set a spending limit and stick to it.
— Try and pay with debit and not credit.
— Start a savings plan for next Christmas asap.
Originally published as Many Australians will rely on credit cards this Christmas to get through costs of festive season