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1 in 5 Aussies will splurge on credit this Christmas – new data reveals - featured image
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1 in 5 Aussies will splurge on credit this Christmas – new data reveals

How are you financing your Christmas shopping this year?

Well, according to the latest data from Finder, millions of Australians are expected to land themselves in debt over Christmas that could take months to repay.

Credit Card Debt

Their survey of 1,056 respondents found more than a fifth (21%) of Aussies – equivalent to 4.2 million people – will rely on some form of credit to fund the festive period with many racking up debts they can’t pay back.

How do you primarily plan on funding this holiday season?
Credit card 11%
Buy now pay later (e.g. Afterpay) 7%
Personal loan 3%
Refinancing my home loan 1%
Savings 49%
Other 2%
I don’t plan on buying anything for the holiday season 27%
Source: Finder survey of 1,055 Australians, November 2023

More than 1 in 10 are planning to primarily use a credit card to fund the holiday season.

The research also shows 7% of cash-strapped shoppers are using buy-now-pay-later services to fund their holiday splurge, while a worrying 3% will take out a personal loan.

Further, the average Australian is expected to spend $1,479 this Christmas on presents, food, alcohol, eating out and travel.

That’s $30 billion nationwide on holiday spending.

Sarah Megginson, personal finance expert at Finder, said many Aussies could have trouble keeping up with debt payments.

She further said:

“The financial pressure of Christmas has many people spending over their limits, but getting into the festive spirit shouldn’t mean getting in over your head.

If you don’t get on top of your repayments, you could end up with a debt hangover that goes well past Christmas and into the new year.”

Megginson urged people to spend responsibly these holidays as Christmas splurging can hurt your credit score.

She commented:

“Your capacity to repay the purchases you’re making, whether you’re paying using credit cards, personal loans or buy now pay later, is what you need to think about before you go shopping – not after."

Shopping At Home

She also encouraged shoppers to create a budget to guide them through the silly season:

“If you rack up a debt of $1,479, it could cost you $148 or more in interest alone. It could be much higher if you end up paying a lot of BNPL fees, and it could take you until next Christmas to pay it off if you don’t have a plan.

Don’t go into it blindly – look at how much you can afford to spend and look for opportunities to cut back in other areas, to free up some budget for Christmas.

Now is a great time to analyse your household expenses and see where you can get a better deal on things like energy, insurance and mobile plans."

Finder’s data highlights that half of consumers (49%) will dip into their savings account to fund Christmas, while almost 1 in 3 Aussies (27%) don’t plan on buying anything this holiday season.

About Chris Dang is an accountant by training and has worked in the Financial Planning industry for many years. Chris brings together property, accounting, and financial planning experience to help clients of Metropole Wealth Advisory create a holistic plan for their wealth.
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