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
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.