A staggering number of Australians are resorting to credit cards to navigate financial hardships, reveals recent research conducted by Finder.

Finder’s Credit Card Report 2024 indicates that nearly half of credit card holders (44%) have made unplanned purchases on their cards within the past year, affecting approximately 4.6 million Aussies who found themselves unprepared for unexpected expenses.

Among these, nearly 750,000 individuals (7%) have resorted to credit cards after depleting their funds before payday, while one in five (21%) have been caught off guard by emergency expenditures.

Black Friday

Additionally, 14% admitted to overspending during sales events like Black Friday, further exacerbating their financial strain.

Amy Bradney-George, a credit card expert at Finder, underscores the impact of rising expenses and inflation on household budgets, driving many to rely on credit cards as a last resort.

“Persistently high inflation rates and aggressive interest rate hikes have taken a toll on finances, leaving many Australians with dwindling savings and credit cards as their sole lifeline,” Bradney-George explains.

Gender disparity

The data also reveals a gender disparity, with women (12%) being four times more likely than men (3%) to turn to credit cards due to insufficient funds before payday. Additionally, millennials are disproportionately affected, with a quarter (25%) admitting to relying on credit cards during emergencies over the past year.

In light of these findings, Bradney-George urges Australians to exercise caution with their spending and prioritize essential expenses. She advises those grappling with credit card debt to explore options such as transferring balances to cards offering introductory 0% interest rates on balance transfers.

“This allows individuals to repay their debt without incurring additional interest charges for a specified period,” Bradney-George explains. “However, it’s crucial to have a repayment plan in place to avoid accruing higher interest fees after the introductory period.”

For those facing financial stress, Bradney-George recommends reaching out to lenders for assistance or seeking guidance from free financial counseling services like the National Debt Helpline (1800 007 007).

As Australians navigate economic uncertainties, proactive measures and responsible financial management are essential to mitigate the impact of credit card reliance on household budgets.