Australian households have hit over $101 billion in credit card and personal loan debt.
Borrowing on credit cards and personal loans has hit $101.4 billion combined as at December 2014, according to the latest APRA data. This is the highest level of personal loans and credit card debt since October 2011, when the combined debt reached $102.7 billion.
During the Global Financial Crisis, the combined Australian household credit card and personal loan debt reached a peak of $112.6 billion in May 2008.
A study of more than 500 personal loan applications submitted last month through comparison website finder.com.au found that more than half (53%) needed the cash to cover bills. This was followed by borrowing to buy a car (21%) and funding a holiday (9%).
Michelle Hutchison, money expert at finder.com.au says the debate over whether to put debt on a credit card or personal loan is a common financial hurdle at this time of year.
“Australian households are often struggling with expenses at this time of year, following an over-spending period over summer,” she said.
However, with more than half of those looking for personal loans last month needing the cash to cover bills, Hutchison says Aussie consumers need to be cautious of adding further financial pressure by borrowing money when they’re already struggling.