One in 10 Australians has defaulted on a bill payment that led to a mark on their credit file. And it's young Australians that are most at risk.
New consumer research from RateCity.com.au has revealed that 70% of defaults occurred before the age of 35, and almost two-thirds (58%) had taken place before age 30.
Ali Cassim, money commentator at RateCity.com.au, said the results are worrying and suggest that many young Australians are unaware of the consequences of failing to make a bill payment on time.
“The research has also shown a trend towards a credit-based society as young Australians are taking on debt earlier than previous generations did,” she said.
“More than half of Australians under the age of 35 said they took out a credit card before they turned 25, compared with just 10% of baby boomers. We're certainly seeing a trend to young people and plastic – clearly, a sign of the times.”
One in five Australians who had suffered a default said they still hadn't recovered financially, and the impact was more severe for young adults, with 25% of people aged 18 to 24 saying they still hadn't found their feet financially.
“What we're seeing is that Australians who have had a financial blip are really struggling to overcome that, and, in many cases went on to further financial difficulty as a result,” said Cassim.
“Half of the people we spoke to said that a default had led to further money troubles, and again the 18 to 24 year olds were the most affected with three-quarters saying they suffered further financially.”