Christmas shopping
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Australian homes will be struggling with Christmas debt for at least the next six months, a new research by comparison website Finder has revealed.

By 2025, it was anticipated that the national credit card debt will have grown to AU$2.7 billion. Around 1.7 million Australians, or 8% of the total population, will have to deal with mounting credit card debt, with the average person owing about AU$1,634.

The financial burden that many Australians will experience in the upcoming months was highlighted by this concerning trend, News.com.au reported.

About 688,000 Australians will require five months to pay off their Christmas debt, indicating that many will find it difficult to make ends meet. Furthermore, a worrying 15% of people will still be paying off their debt by Christmas of next year, while 304,000 people would need six to eleven months to settle their holiday costs.

Just 25% of Australians will pay off their debts in less than a month after spending money on their holidays. Nevertheless, Gen Xers were more prone to overspend; 11% of them accrued Christmas debt, compared to 6% of baby boomers. Overspending by Australians will have long-term effects that go well beyond the holidays, Sarah Megginson, a personal financial specialist at Finder, said.

"Millions of Australians have hit 2025 already burdened with debt," Megginson said. "During December, many Australians rack up substantial credit card bills and buy now, pay later balances, setting themselves up for a significant financial strain in the months to come."

Experts advise prioritizing debts with high interest rates and fees and moving them as soon as possible to low-cost solutions to prevent accruing hundreds of dollars in interest.

"Interest-free balance transfer credit cards, with a small balance transfer fee of one to two per cent, are available for up to 30 months and could be a lifeline for those who splurged at Christmas," Megginson said, per Sky News. "It could be much higher if you end up paying a lot of BNPL fees, and it could take you until next Christmas to pay it off if you don't have a plan."