Australia has second-highest consumer debt

Yasmine Raso

Senior Journalist, Financial Newswire

27 July 2023

New global analysis from Moneyzine found Australia ranks second out of 65 countries for the highest amount of average consumer debt per person (aged 15 to 64 years old) at USD$137.89.

This comes after monthly credit card transactions recorded an all-time high of $33.5 billion in January and credit card debt surpassed electricity bills to become the top concern for Australians calling the National Debt Helpline.

Australia was only USD$55.21 behind first-place Switzerland which averaged USD$193.01 of consumer credit debt per person, 93 per cent higher than the global average of USD$12.98.

Australia also rounded out the top three countries with the highest monthly cost of living at USD$1,944; Switzerland ranked first at USD$2,497 and Norway finished second with USD$2,074.

Moneyzine’s data also found nearly 17 per cent of people live in a “debt-laden household” in Switzerland. Portugal rounded out the top 10 with the lowest monthly cost of living at USD$1,038 and consumer debt per person of USD$20.81.

The figures also reflect the impact of inflationary pressures around the world, with interest rate rises and increasing costs of living forcing consumers to look to credit as a new income source.

“In general, consumer credit isn’t a dangerous thing – there can be many upsides such as improving your credit rating if you pay the debt off in time, and getting items you want before needing to save for them,” Jonathan Merry, CEO of Moneyzine, said.

“The danger comes when people continue to take out loans or finance options to buy things they can’t afford. When you’re paying $15, $20, $30 for each loan every month – it adds up very quickly and could easily get out of control, which is why debt is one of the highest reported factors relating to low moods in adults.

“One of the best ways to avoid getting into financial situations that you can’t afford is by keeping track of your spending every month.

“t’s important to keep track of your in and outgoings every month. By tracking your spending, you can better prepare for the future and reduce the need for payday loans with high interest rates.”