Australia's Christmas Overspending Aftermath: $2.5 Trillion Debt Pile

Published 08 Jan.2025 07:28(KST)

Approximately 1.7 million Australians are suffering financial burdens, with debts amounting to 2.7 billion Australian dollars (about 2.5 trillion Korean won) due to overspending during last year's Christmas period.

Shopping cart filled with purchased items (Photo by Jeong Dong-cheol)

On the 7th, the Australian daily newspaper The Sydney Morning Herald cited a recent survey conducted by the online consumer comparison site Finder, reporting that 8% of the 1,010 respondents incurred debt during the Christmas period, and among them, 20% expected it would take more than six months just to repay this debt.

The increase in retail spending recorded by Australians during the year-end holiday period appears to be leading to financial pressure for debt repayment as the new year begins.

In fact, the Australian Retailers Association (ARA) forecasted that consumers would spend 69.8 billion dollars ahead of last year’s Christmas, with an average gift cost of 707 dollars per person. Additionally, retail spending totaled 3.7 billion dollars over six days following Christmas, including 1.3 billion dollars on Boxing Day, marking a 2.7% increase compared to the previous year.

Financial counseling expert Deb Shrout expressed concern, saying, "After Christmas, the number of people seeking financial counseling increases, and this trend continues through the first quarter every year. Many face additional debts and bills not only due to gifts, celebrations, and holiday expenses but also because of preparations for the new school term."

Shrout also pointed out that many people fall into financial difficulties after using Buy Now, Pay Later (BNPL) services. He warned, "I have seen many clients using at least five BNPL services. Taking on more debt to repay existing debt can easily lead to an unmanageable situation."

BNPL provider Afterpay has introduced a new feature allowing customers to set their own spending limits. An Afterpay spokesperson stated, "In the last quarter of 2023, 98% of purchases were processed without late fees, and 95% of installment payments were made on time."

According to the recent MoneySmart report released by the Australian Securities and Investments Commission (ASIC), 16% of respondents used BNPL services for Christmas spending, while 31% relied on credit cards.

Shrout emphasized that there are ways for people struggling with debt to get help. He said, "You can contact BNPL companies to negotiate payment deferrals or use confidential financial counseling services. It is best to act quickly to resolve debt issues, but it is never too late. There is always a solution in any situation."

Jung Dong-chul, Hanho Times Reporter

※This article was written using content provided by Hanho Times (www.hanhotimes.com).