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Holidays are most likely to put people into debt

Holidays are most likely to put people into debt.

A study commissioned by Money.com.au has revealed that nearly one fifth (19 per cent) of Australians admit the debt they have is because of their spend on holiday and leisure activities.

And it was for those under 30 that this was most likely to be the case, with nearly a third (28 per cent) of young Australians going into debt most because of this reason, compared to 16 per cent of those over 60 and 12 per cent of those in their 40s.

Money.com.au spokesperson, Helen Baker, said: "The fact that the major category incurring credit card debt for consumers are on essentials - including groceries, insurances, and utilities - tells us two different things. The first is that Aussies are struggling to make ends meet with their own paycheck, so they're turning to credit to help them get by. This may be why a fifth of Aussies don't think they'll be debt-free this year, as they will continue to add to their debt by paying hundreds of dollars of essentials on it each month.

"However, the results could also indicate that a proportion of people had been using their credit cards to accumulate loyalty or frequent flyer points, rather than because of a lack of funds. The reason being is that 58 per cent are paying less than $120 a year, or less than $10 a month, on interest. This could suggest that these people are paying the majority of their balance off each month but are making most of their purchases on their card."

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