Compare the Market is warning Australians to be wary of putting Christmas on credit this year, with alarming new research revealing that 41% plan to pay for Xmas using credit cards, personal loans and Buy Now, Pay Later Services.*

It comes as the average Australian is set to fork out $828.01 this year on presents, decorations, food and all the Christmas trimmings. Some states are expected to spend even more, with the average spend in Victoria and New South Wales skyrocketing compared to other areas.

*Source: Compare the Market survey of 1,004 Australian adults, conducted October 2025.

Compare the Market’s new research revealed that while the majority of people surveyed (53.78%) said they would make purchases using cash or money from their savings account, 32.31% said they would use a credit card, 7.8% would be using Buy Now, Pay Later services, while just 0.73% said they would take out a personal loan to fund the festive season.

Compare the Market’s Economic Director David Koch said Australians should think twice before putting Christmas on credit.

“It’s an expensive time of year, but the last thing we want to see is people racking up hundreds of dollars of debt and starting 2026 in the red,” Mr Koch said. “It can feel so easy to buy all the presents using Buy Now, Pay Later or pop the Christmas feast on a credit card, but it doesn’t take long for those transactions to spiral into long-term debt if you’re not on top of what you’re signing up for.

“If you miss a payment or can’t get your head around interest on credit cards, your dream Christmas could quickly turn into a nightmare that you’re paying off for years to come.”

For example, Compare the Market analysis shows that financing $828 for Christmas on a credit card with a 20% interest rate would take five years and 11 months to pay off and cost you $1,417 in total, assuming you only made minimum repayments.

“This is why you have to be so careful if you’re going down the credit card route this Christmas,” Mr Koch said. “In this example, a quick tap of your credit card could end up costing you $589 and nearly six years to pay back. That’s a big financial commitment for just one day.

“Instead, I’d be looking at other ways to claw back cash. Are you on the most competitive offer with your electricity retailer? Could you save more by switching to a cheaper insurance provider? How much extra can you pocket by switching from big brands to generic names at the supermarket?

“I’ve seen first-hand how these little switches throughout the year can save families all over the country significantly, so that’s my challenge to Aussies before they reach for the credit card this Christmas.”

Mr Koch also warned Australians not to fall into the psychological trap of Buy Now, Pay Later services.

“It can be so tempting to rely on Buy Now, Pay Later services for Christmas purchases, but it doesn’t take long for those payments to snowball – especially if you’re a sucker for a sale sign or go a little mad in the shops at this time of year,” Mr Koch said. “Combine all those Buy Now Pay Later costs with things like your summer energy bill, back-to-school fees and the everyday expenses we all face, and you could find yourself struggling to keep afloat in the New Year.”

David Koch’s top festive budgeting tips.

1. Lock in your festive budget early and stick to it
   Don’t let Christmas creep up on your wallet. Write down everything, including gifts, food and travel and set a realistic limit. If you can’t pay it off straight away, it’s likely too much. A clear plan now means no nasty surprises in January.
2. Rethink what makes a great gift
   Big price tags don’t equal big smiles. Homemade treats, personalised experiences or even a thoughtful letter can mean more than the latest gadget. Creativity beats credit every time.
3. Beat the last-minute panic
   Impulse buys are budget killers. Start shopping early to grab deals and avoid the pressure of Christmas Eve splurges. Planning ahead means more savings and less stress.
4. Compare and conquer
   Before you splurge, look for savings elsewhere. Switching energy retailers, insurance providers or even assessing your home loan rate could free up hundreds for your festive budget. A few minutes comparing deals can make a big difference.

For more information, please contact: 

Phillip Portman | 0437 384 471 | [email protected]

Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.

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