New research has found that Gen Y is holding an increasing amount of non-mortgage related debt.
The consumer study by comparison website RateCity.com.au reveals that Australians are now taking on debt earlier in life, with age 20 the new average age for young people to purchase their first credit card.
This compares with the average age for older generations – such as those aged 65 years and older – who applied for their first credit cards at age 34.
RateCity.com.au chief executive Alex Parsons said it’s a worrying trend, given that young Australians are struggling with higher levels of debt.
“Our research shows 42 percent of young people under the age of 24 have between $10,000 and $30,000 of personal debt, not including a mortgage,” Mr Parsons said.
“Australians aged 24 and under are also four times more likely to get a weekly cash advance from their credit card than were their parents’ generation,” he said.
More than half (56 per cent) of Gen Ys with a credit card have never had a $0 balance on their credit card in the last year, and 63 per cent are not aware what interest rate they are paying, the report found.
“It’s a real concern, given that the average credit card rate is close to 17 percent – that’s a lot of interest we’re talking about there,” Mr Parsons said.
The number of credit cards on issue is on the rise – with 117,000 incremental cards on the market compared to last year – growing to 15.5 million in May, according to data from the Australian Bureau of Statistics.
The RateCity research found 34 per cent of people under the age of 34 have applied for a credit card online in the last six months.