Navigating Out Of Debt In 2023 Will Take Serious Effort And Dedication

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A recent survey illustrates that millions of Australians need help with debt incurred from buy now pay later schemes.

Harnessing the power of a fresh start, many people make it their mission to prioritise their finances and break away from whatever debt they may have accumulated. After all, getting in shape and limiting drinking are only two of the most popular New Year’s resolutions for a reason.

With prices constantly rising and interest rates becoming more expensive, debt is quickly causing a significant burden in households across Australia. Many now depend on credit to make ends meet as they struggle to cope with the financial strain.

At 23 years old, Lara Clarke accumulated thousands of dollars in debt to purchase essential items she could not pay for – like a bed and Christmas gifts.

“I didn’t have the money at the time, so I just put it all on my Zip Pay – but it’s added up quickly,” chef Lara Clarke said.

Living with her parents, Ms Clarke pays rent and covers most of the groceries, which have become very costly. Because of this, she has accrued $5000 worth of buy now-pay later debt that she intends to address during 2023.

To extinguish her debt as swiftly as possible, she plans to close out her buy now pay later account for good.

The quicker I get it paid off, the quicker I feel much better,” she said.

According to a Finder survey, millions of Australians are sinking in buy now pay later and other debts. Appallingly, 8% have become mired with debt due to BNPL services, while 1 in 10 is experiencing crushing credit card debt distress.

Even though more people are slipping into debt, the amount they carry has surprisingly decreased. 

According to Canstar’s calculations, average debt levels dropped from $46,020 in 2021 to a mere $13,312 in 2022 – with credit card debts accounting for over 40 per cent of all debts.

Australians paid down billions in debt during the pandemic, but the rising cost of living has seen credit applications surge again. There is a lot of fear about what is to come and not knowing what to do,” she elaborated. 

Sally Tindall, RateCity research director, believes that many people will enter the new year carrying over their Boxing Day debts.

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