It’s a stark statistic: roughly 9% of Australian credit card holders have completely maxed out their cards – that’s well over one million people. Many of these are older Aussies living on fixed incomes, who have found themselves squeezed by soaring prices.

Today, we explore what’s driving this debt surge among retirees and pensioners, and how they can claw back control of their finances.



The backdrop is brutal. RBA data show that by late 2024, total credit card debt in Australia had risen to about $17.8 billion, with consumers charging a record $28 billion on their cards in December alone. Many households simply couldn’t clear these bills – as one analysis warned, this “credit card debt accruing interest is on the rise on the back of pre-Christmas spending in a cost-of-living crisis”. In other words, erratic spending and higher prices have left people relying on cards more than ever.

Why retirees are feeling the squeeze​

For retirees on an Age Pension or fixed super drawdowns, the pressure is intense. Groceries, power bills, insurance and medical costs have jumped far faster than pensions. In March 2025 the government did index pensions to inflation, but the increase was tiny – just $4.60 per fortnight for a single pensioner.

Meanwhile, food prices and electricity costs have risen double digits in recent years. Many seniors report having to cut out treats, downgrade lifestyle expenses, or even forgo meals to make ends meet. In a national survey, one pensioner summed it up brutally: “I have zero savings, zero superannuation & my credit card is maxed out.”

Not all older Australians are in the same boat, which makes the picture more confusing. For example, retirees with no mortgage and solid savings have actually been spending more during the inflation squeeze.

CommBank iQ data show that Australians over 55 years old increased their spending “vastly more” than younger generations, even after accounting for price rises. This reflects that wealthier baby boomers have benefited from high term-deposit rates and stock market gains. But for pensioners without any margin of safety, the story is much darker: many are literally “living on a credit card” just to pay basic bills.



Inflation isn’t uniform either. The ABS’s Living Cost Index (which tracks price rises for retirees) shows that age-pensioner households saw costs rise about 2.9% over the year to Mar 2025, roughly in line with headline CPI. Self-funded retirees (drawing on super) saw about 2.4%. But averages hide spikes on essentials: insurance, fuel and rent jumped much faster. One retiree noted that a single rent hike “was more than my age pension half-yearly adjustment”. In short, a small pension bump can’t keep pace with big increases in rent, groceries or health costs.

Interest rates add another layer. Retirees with savings (who might have breathed a sigh of relief when rates were slashed) also face uncertainty. Last year’s high cash rates gave good income to those with big term deposits or bonds.

But as one analysis observes, if rates fall, it could “shake the foundations” of retirees’ finances. With over $1.57 trillion sitting in Australian bank deposits and 4.2 million retirees relying on that interest, any RBA cut will hit them hard. So older Aussies face a paradox: historically high interest helped their savings (and spending), but there’s a worry that falls in rates will leave them short in future.

The credit-card debt race​

Aussies of all ages have leaned on plastic to bridge the gap. According to a Finder survey, 37% of cardholders (around 4.9 million people) engaged in “concerning credit-card behaviour” over 12 months. Specifically, 14% admitted to impulse buying with plastic, and 9% said they’ve entirely maxed out their credit card balance – roughly mirroring the “over one million” figure that made headlines. (Finder’s Amy Bradney-George notes the risks: “the cost of interest can add up if you don’t pay it off each month… impulse buying can make it harder to pay back… and get you into debt”.)

Driving this trend is the fact that many people have few other options when dollars run short. A recent Finder survey cited by 9News found 44% of cardholders admitted to unplanned purchases over the past year (roughly 4.6 million Australians) because of cost pressures. About 7% had run out of money before payday and turned to their card, and 21% were caught out by emergency expenses.



As Amy Bradney-George summarizes: “Stubborn inflation and aggressive interest rate hikes have weighed heavily on finances. Savings are being depleted, leaving credit cards as many people’s only option to get by.”

Unsurprisingly, this debt is accumulating. The Guardian reports that Australians collectively owed a record $17.8 billion on cards at the end of 2024, up over $200 million in just one month. Even worse, December 2024 saw a record $28 billion in card spending – a spending spree that “leaves many households unable to clear debts”.

Canstar’s data insights director Sally Tindall warns we’re in a “national addiction to credit card debt” that is “likely to get worse before it gets better”.In short, as prices surge, Australians – including an alarming number of seniors – are relying on credit to stay afloat, and the interest is piling up.

What the experts and advocates say​

Faced with these trends, financial experts emphasize caution. ASIC’s MoneySmart site reminds card users: “credit cards are part of everyday life… but this convenience can come at a cost”. Their tips are straightforward: pick a card that suits your spending habits and repayment ability, ideally with a low interest rate; only spend what you can afford to pay back; and always pay your bill on time or in full.

If you’re having trouble, MoneySmart explicitly warns “if you’re struggling with debt, avoid using your credit card to make ends meet”.

Finder’s analysts offer similar advice, aimed especially at people in debt. Taylor Blackburn notes bluntly: “Credit cards aren’t just free money, so be careful with your spending... If you do find yourself in debt, you can buy yourself some extra time by taking out a 0% balance transfer credit card and consolidating your debt. The less you pay on interest, the more you can put towards actually paying off your debt.”

In other words, swapping high-interest balances onto a promotional 0% card can stop your debt from spiralling, but only if you have a plan to pay it off before the low-rate deal ends. Finder’s Graham Cooke also reminds borrowers that there are two main types of cards – low-rate and rewards – and you should start with a simple low-rate card that you can clear each month. Only consider those fancy rewards cards “if you can successfully spend on this card and pay it off in full every month”. Otherwise, the perks aren’t worth the interest hangover.

Consumer advocates echo these themes. Financial counsellors (often from non-profits like Financial Counselling Australia) urge households in trouble to reach out early. They can work with you to set up a realistic budget, negotiate with banks, or apply for hardship relief. If you find yourself unable to meet the minimum card repayments, don’t panic – and don’t bury your head.

As one adviser puts it, you should “contact your lender to discuss options, or the National Debt Helpline on 1800 007 007 for free financial counselling.” These free counsellors won’t judge you; they’ll help you explore options (like repayment plans or consolidating balances), and may connect you to other support services.

Top tips: Budgeting and debt-control for retirees​

The good news is that there are practical steps retirees can take right now. Consider these key strategies:

• Revisit your budget. Track every dollar you spend on essentials like food, medicine and utilities. Cut any non-essential expenses – say, dining out, holidays or memberships – until your finances stabilize. ASIC’s MoneySmart budgeting tools can help you plan.
  
  
• Use your card wisely. Only spend what you can afford to repay. Always pay at least the monthly minimum on time (better yet, clear the full balance). This avoids penalties and growing interest costs. If you’re tempted by sales or impulse buys, remember Finder’s warning: “credit cards aren’t just free money”.
  
  
• Consider consolidating debt. If you’re carrying balances on multiple cards or loans, ask your bank about a balance-transfer credit card with an introductory 0% interest period. This can be a useful way to pause interest charges and tackle the principal, but only if you avoid new spending and have a solid repayment plan. Alternatively, a low-interest personal loan (or a home equity loan, if you own a home) might refinance your debts at a cheaper rate. Be sure to read all fees and terms.
  
  
• Talk to your lender. Don’t wait for the bills to pile up. Banks often have hardship teams that can temporarily reduce payments, waive fees or lower interest if you explain your situation. They may also offer to lower your credit limit to prevent overspending.
  
  
• Use free counselling. Remember, financial counsellors are free and impartial. You can call the National Debt Helpline (1800 007 007) or find a counsellor in your state via their website. These professionals can negotiate with creditors on your behalf and help you devise a workable budget – a huge relief if it all feels overwhelming.
  
  
• Stay informed and empowered. Read up on the rules around superannuation and Age Pension. For example, certain lump-sum withdrawals or downsizing your home can create tax-free cash buffers in retirement. (And yes, making above-minimum super contributions during working life could be counted as a tax deduction to shave bills, but that ship may have sailed.) Keep an eye on interest rates: if rates fall, shop around for higher savings rates or consider term deposits to make the most of your cash.

Government support and concessions​

Don’t forget the help that the government already provides for older Australians. If you’re on the Age Pension, you should automatically hold a Pensioner Concession Card, which gives cheaper prescriptions, bulk-billing doctor visits and discounts on utilities in many states. There’s also the Commonwealth Seniors Health Card (if you’re not eligible for pension but on a modest income), which grants various savings too. Investigate any rent assistance (if you rent privately) or health care rebate you qualify for.

Services Australia (Centrelink) offers some useful programs: the Centrepay system lets you have bills paid directly from your pension fortnightly, so big electricity or rent expenses don’t arrive all at once. They also have a Financial Information Service (FIS) – free and confidential financial education – and can put you in touch with state-based community support. Importantly, their website notes that you can find a financial counsellor through the National Debt Helpline site, reiterating that help is literally a phone call away.

A crucial decision time​

No retiree expects to end up living on plastic, but many have found it’s become the only stopgap in hard times. The key now is taking action before debts spiral. This means being honest about spending, seeking advice early, and making the most of any available support. As Finder’s experts note, small habits (like paying more than the minimum and avoiding extras) can dramatically reduce interest costs.

In the end, the question is: how will you respond? Will you let the bank’s interest charges eat away at your retirement, or will you tighten the belt now and use the tools and support available to stay on track? It’s a tough spot, but even at age pension age, there are choices: a larger budget, professional advice, or tougher repayment plans. Every dollar saved on interest is another few cups of tea or grocery bill paid.

So we leave you with this: what is your plan to survive the squeeze? Are you ready to tackle your credit card debt head-on, or will you let it dictate how you live out your golden years? The power to change it lies with you – and you’re not alone in this.

Read more: ‘Back to the Stone Age’: Blackouts Show Why Cash Is King in Australia