Australians are forking out about $512,000 every hour in credit card interest as people struggle to pay off their debts.
A study conducted by financial services firm Carnstar found the amount of interest Australia pays on credit card debt per month is around $374 million.
Matthew Neville, 33, works a nine to five job as a business process improvement specialist for a large corporation, has a six-figure salary and has $50,000 of credit card debt.
“Anyone who has ever experienced anxiety will know it’s that feeling of something always being there, it’s always in the back of your mind and you can’t get rid of it, it’s the same feeling but real.”
Credit card debt is a familiar demon for Mr Neville, finishing his degree with $10,000 worth of debt. The difference was that back then he paid it off almost straight away.
“I was earning less than a third of what I’m earning at the moment, and for some reason, I still managed to put away the money,” he said.
Mr Neville said social media platforms such as Instagram and YouTube fuelled his desire to purchase new goods and holidays as it encouraged his fear of missing out.
“Everyone seems to be having a tropical getaway and all of a sudden you are thinking to yourself ‘when am I booking my next holiday?’… so you just get a new credit card and ignore the fact that you can’t actually pay for that holiday.”
Mr Neville admits that it’s difficult to accept that he is barely scraping by, living payday to payday and finding it virtually impossible to repay his debt because of interest.
“I am addicted to wanting things. It’s really easy to convince yourself that it’s a need not a want..
“I was watching a YouTube video yesterday on some fitness stuff and the guy was talking about some new protein powder… of course, I opened Google, searched it and I bought it straight away.”
The Salvation Army's Moneycare service is the biggest free financial counselling provider in Australia. The service is in high demand and works with clients to prevent financial crises from occurring and enabling people to withstand financial shocks that come up in their lives.
Co-ordinator of Moneycare Tony Devlin said the debt to income ratio for Australians was approximately 190%.
“For every dollar of income, everyone’s got $1.90 debt on average and that’s quite a lot.”
“If something happens in your life and you lose your job or there is an illness, or perhaps an addiction…people get funds from anywhere available just to keep things going,” he said.
Mr Devlin said people often found themselves in financial hardship due to Australia’s consumer-driven society. “Credit is too readily available, either through credit cards or other predatory lenders…people can get themselves into big strife.”
“Ultimately, we are a highly consumeristic society and along with that, we have ready access to credit, which is a dangerous combination.”