Christmas credit and rising utilities straining Australians

The number of calls to the national debt helpline reached a record high last year.

  • More people are turning to financial counsellors
  • Large credit debt and rising electricity bills are to blame
  • Experts warn against short-term credit

Rising cost-of-living expenses and large credit debts have resulted in more Australians turning to financial counsellors for help.

The national debt helpline was inundated with 170,000 calls in 2017, a 12% surge over the previous year as the number of people struggling to make ends meet reached a record high.

Mounting credit card debts following the Christmas break and rising electricity bills are placing the most strain on people, says Graham Smith, chair of the NSW Financial Counselling Association.

He recommends people take initiative by being proactive when it comes to dealing with their increasing debt.

"Contact your creditors and negotiate a payment plan, but don't stick your head in the sand and wait until you receive a notice from a debt collector," he says.

"And don't – under any circumstances – seek short-term credit because it gets you into more debt."

Smith's warning follows regulatory action against Radio Rentals that will see almost $20 million refunded to short-changed customers, and comes at a time when legislation governing payday loans and consumer leases is being debated.

Australians collectively owe more than $50 billion in credit card debt, according to the financial regulator, with the average card holder owing $4254 and paying $701 in interest per year.

This is coupled with the ongoing rise in electricity bills – a utility that has surged by as much as 20% in some states.

Smith says people should call the national debt helpline as soon as they feel the pinch, but he notes the surge is taking a toll.

"The demand for financial counsellors is increasing and there are never enough to go around... but you will be seeing a trained professional who can help you navigate your finances and reduce your stress," he says.

The national debt helpline is managed by Financial Counselling Australia, a nonprofit that advocates for people experiencing financial difficulties. The debt helpline itself is a free service.