How much debt does the average Australian have, and how can they pay it off?

More than one in three Australians (35%) are carrying some kind of personal debt (excluding property loans), according to Canstar’s 2024 Consumer Pulse Report. The average amount of debt has seen a sharp increase since 2023 with the majority of Aussies who are saddled with debt holding it in either credit cards, personal loans, HECS/HELP fees or BNPL.

With the nation’s debt on the rise, where are Australians most likely to be carrying their personal debt, how are they coping, and most importantly, how can they pay it off?

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How much debt does the average Australian have?

The average amount of debt the average Aussie varies greatly depending on your age,  however, debt is for the most part on the rise. Canstar’s 2024 Consumer Pulse Report saw a sharp increase in the average amount of personal debt held by Australians, with 35% of Australians having an average of $15,179 personal debt. This figure has risen significantly since the previous report—which saw the average individual debt figure come in just under $9,000.

Younger Australians have, on average, higher levels of debt: 45% of Gen Z admit they have personal debt of approximately $23,888 and 38% of Millennials with a personal debt of approximately $18,135. Baby Boomers have the least personal debt— 27% have an average of $7,173.

Where do Australians have most of their debt?

Nearly half (49%) of Australians with personal debt (excluding home loans) carry it on a credit card. While for some, taking advantage of features like interest-free periods on a credit card can be a savvy way to manage bills and expenses, missed repayments or overspending can be a slippery slope that could see debt start to climb.

The proportion of people with Buy Now, Pay Later (BNPL) debt has declined slightly, from 27% in 2023 to 23% in 2024, while the share of Australians with student loan debt via HECS or FEE-HELP has risen slightly, from 20% last year to 22%.

How are Australians coping with their debt?

Figures from the 2024 Canstar Consumer Pulse Report reveal that those with debt are finding it increasingly difficult to manage their debt. Missed repayments are a significant concern among Australians with debt—42% admitting to missing at least one repayment.

While some will have repayment plans or strategies they’re able to manage, one in five Australians with debt (20%) say that this isn’t the case for them, admitting that they don’t think their personal debt is manageable. This is on top of the 54% of Australians who say that they regularly worry about their debt for themselves or their family.

What can you do if you are worried about your debt?

The report revealed 76% of Australians plan to repay some or all their debt this year. This being said, there is no ignoring the impact of increased cost of living pressures on already squeezed budgets, with 14% of those with personal debt admitting that they will need to prioritise other essentials first.

No matter where you are in your financial journey, there are some ways you can make headway in paying off your personal debt.

Tips to help pay off your debt

If you’re looking to improve your financial wellbeing and start paying off your personal debt, here are a few tips you may consider:

• Focus on high-interest debts first: Use the avalanche method to pay off the most expensive debts while making minimum payments on others.
• Consider debt consolidation: If you’re juggling multiple debts, consider consolidating them into one loan with a lower interest rate. This can simplify your repayments and potentially reduce the overall cost of your debt. Just make sure you understand the terms and conditions (which can be found in the Product Disclosure Statement (PDS)).
• Look into a balance transfer credit card: A balance transfer credit card can allow you to transfer the balance of a credit card or multiple cards into one. These types of cards typically come with introductory offers of low or even no interest charged for a limited time to help pay your balance off and make payments more manageable. However, be aware you’ll typically have to pay fees and the interest rate will likely increase after this initial period.

Keep your focus on the reward of becoming debt-free and take care to avoid adding new debt along the way.

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