Fresh data has pointed to rising reliance on credit for essentials and mounting pressure on household repayments.
Experian’s latest Spend Index has found that a growing share of Australians are using credit to cover everyday essentials, while an even larger group are struggling to stay on top of repayments.
The Spend Index revealed that credit had become embedded in day‑to‑day household budgeting, rather than being reserved for occasional big‑ticket purchases.
More than one‑third of Australians (36 per cent) reported relying on credit to pay for everyday or essential expenses, and 37 per cent said they were using one form of credit to manage or repay another facility.
Experian said that this emerging pattern was a warning sign for anyone exposed to household spending and borrowing.
“For lenders, retailers, policymakers and brands understanding where pressure is building will be critical to navigating what comes next,” it said.
Alongside that rising reliance, 41 per cent of respondents said their credit repayments were becoming harder to manage, which Experian suggested could presage a rise in missed payments.
Home owners tighten budgets and reshape borrowing
The report also indicated that home owners were cutting back sharply as higher borrowing costs set in.
Experian found that spending growth had slowed across both essential and discretionary categories, describing home owners as tightening their belts “aggressively”, with visible shifts toward stricter budgeting.
The analysis said that average home loan values had risen by 18 per cent over the past three years, while those who had bought more recently were described as “doubly affected”.
Among households holding several credit facilities, the report identified a change in the mix of borrowing rather than a simple retreat from credit.
Experian observed that many home owners were using less traditional revolving credit while turning increasingly to instalment‑style options.
“Among consumers holding multiple credit facilities, home owners reduced credit card usage while increasing reliance on BNPL, suggesting a shift toward more flexible borrowing,” Experian said.
The survey also showed how housing ambitions are being reshaped.
Only 3 per cent of respondents nominated getting onto the property ladder as a key financial priority in 2026, while 46 per cent said interest rates were affecting their ability to meet housing costs.
BNPL growth and more deliberate money management
Experian’s data showed buy now, pay later (BNPL) spending rose 16 per cent in 2025.
Barrett Hasseldine, head of data science at Experian Australia & New Zealand, said the numbers revealed a more intentional approach to managing pressure.
“Consumers are becoming far more strategic in how they manage financial pressure. Rather than pulling back spending entirely, many households are reprioritising where money goes and using a mix of savings, spending choices and flexible payment options to manage cash flow,” he said.
Confidence, savings, and discretionary spending under strain
The survey results further pointed to an erosion of both confidence and savings buffers.
More than three‑quarters (77 per cent) of Australians said they were changing their financial behaviour due to concerns about the broader economy, with only 33 per cent feeling optimistic about their household finances heading into 2026.
At the same time, 72 per cent reported that their savings had fallen in 2025, 66 per cent experienced financial stress, and 76 per cent faced greater pressure on household cash flow.
Discretionary outlays are also being pared back as part of that adjustment.
Respondents reported cutting spending on eating out (72 per cent), takeaway food (61 per cent), shopping and retail purchases (57 per cent), and domestic travel and holidays (39 per cent).
[Related: FHB pullback almost as steep as investor retreat]
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