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Posted by Revive Financial on Aug 9, 2019 9:01:00 AM

Credit cards are a major source of financial difficulty for many Australians. They can lead to a bad debt cycle and for older Australians struggling with credit card debt, it can even lead to extreme outcomes such as homelessness if they don’t seek financial assistance. The Australian Securities and Investments Commission (ASIC)’s review of credit cards reveals more than 1 in 6 Australian consumers are struggling with credit card debt. Many of these, according to The Salvation Army’s Moneycare 10-year analysis report, are older Australians. Moneycare is a subsidiary of The Salvation Army and provides free and confidential financial counselling services to people from all walks of life.

The report reveals that during the 2008/09 financial year, 19% of Moneycare’s clients were aged 55 years and older. During the 2017/18 financial year, this number increased to 26%. The most common reason older Australians ask for financial assistance is credit card debt at 49%, followed by personal loans at 30% and electricity debt at 25%. Consequently, the risk of housing stress and possibly homelessness at a retirement age increases for those on a low income or those who experience financial hardship at the later stage of their life.

Many older Australians are taking on credit card debt as a means to pay for necessities because they don’t have a high, stable income. Unfortunately, personal circumstances change as we get older. Health can decline and employment opportunities decrease which may impact the ability for you to stay on top of credit card repayments. This makes older Australians more vulnerable to falling into credit card debt, which is why it’s important to know the warning signs and understand exactly when you need to seek help.

Credit Card Debt Warning Signs

Having a growing credit card debt can cause overwhelming financial stress for older Australians. These are some early warning signs which can help you understand when you need to take action and seek financial assistance due to your credit card debt.

1. You Use Your Credit Card to Meet Basic Needs

Your income should be used to pay for everyday necessities such as food, clothing and petrol – not to pay off your credit card debt. Having to use a credit card to cover these types of expenses is a sign of financial trouble.

2. You Have Overdue Credit Card Bills

If you have credit cards which are currently overdue, you may have run into unfortunate financial trouble that’s keeping you from making repayments. This could be a decline in health, a sudden job loss or medical expense – whatever the case, once you’re behind in credit card repayments it’s difficult to get back on track.

3. You Don’t Have an Emergency Fund

An emergency fund gives you some breathing space to deal with debt if life throws you something unexpected, such as a sudden loss of income or emergency medical expense. But not every Australian is fortunate enough to have an emergency fund and if you don’t, you may feel forced to use your credit card in these situations instead. Whether you have excessive credit card debt or not, you should always have a plan in place to pay off your balances.

4. You’re Only Making Minimum Repayments

The minimum repayment amount of your credit card debt is calculated to benefit your credit supplier. By only paying the minimum, you’ll end up paying thousands of dollars in interest and it could take decades to repay your debt, especially since it’s still common for credit cards to have over 20% interest. This is where a budget can help so you don’t fall further into debt.

5. You Have Maxed Out Credit Cards

If your credit cards are all maxed out, this is a major warning sign you’re already in credit card debt. You need to make the decision to pay off your credit card debt and change your behavior to make wiser choices about using a credit card in the future. If your credit card debt is unmanageable, we can help you consolidate your debts and pause your interest by implementing a Debt Management Plan (DMP). Our DMP can be tailored to your individual financial situation and help you pay off your credit card debts with an affordable repayment schedule based on your budget.

Plan to Pay Off Your Credit Card Debt with Financial Advice

It’s important for you to talk about your financial situation if you’re finding it difficult to manage your credit card debts. The first step is to speak to a free financial counsellor. Financial counsellors are invaluable in the debt management process and can help inform you on the best course of action moving forward. Their services are non-judgemental, free, independent and confidential. Engaging a financial counsellor can help you:

  • Get a clear picture of your overall financial situation,
  • Explain what options you have in relation to your debts and the advantages and disadvantages of all options available,
  • May advocate or negotiate with creditors, government agencies and others,
  • Develop a budget and money plan, and
  • Listen and provide emotional and physical support.


Alternative Debt Relief Solutions for Older Australians 

If you’re an older Australian struggling to make ends meet, there are alternative debt relief solutions available which can help.

Informal Options

Credit Card Balance Transfer

If you’re having difficulty repaying your credit card debt, most lenders will give you the option of a credit card balance transfer if you communicate with them about your financial situation. A credit card balance transfer allows you to transfer your credit card balance on a card with high interest to a card with zero interest for a certain period of time. This gives you the opportunity to get your finances back on track and repay your credit card debt more affordably, before the interest kicks back in.

Mortgage Refinance

Credit card consolidation through refinancing your home loan could be the answer to your financial woes. Refinancing allows us to consolidate your debts into one mortgage repayment. This will reduce your overall debt payment and interest rate so you can finally take a step back from your finances and breathe easy.

Informal Agreement

An informal agreement, or as we call it at Revive Financial, our Informal Agreement, is an agreement between you and your creditors to change the terms on your existing debt contracts. This allows you to renegotiate the terms of your debt and settle on a new, affordable payment arrangement based on your budget.

Formal Options

Part 9 Debt Agreement

A Part 9 Debt Agreement is a legal and binding agreement between you and your creditors. It outlines a new affordable payment arrangement of your unsecured debts – such as your credit card debts and personal loans. A Debt Agreement allows you to repay only a percentage of each dollar you owe, allowing you to move forward financially and avoid the consequences of Bankruptcy.


As a last resort, Bankruptcy can be considered to release you from your debts, allowing you to make a fresh start. Bankruptcy may not be the right option for everyone, but for the right people in the right circumstances, it can be a saving grace.

If you’re an older Australian struggling with credit card debt, or you know someone who is, it’s important to seek financial assistance immediately before Bankruptcy becomes the only debt relief option available. At Revive Financial, we help older Australians every day find financial relief from their debts with our Debt Management Plan. We assess your individual financial circumstances and tailor a solution to suit your needs. Get in touch with our team today on 1800 534 534 for a free consultation.

Topics: Credit Card Debt, Personal Debt, Debt Management Solutions

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