Top 5 Trending Financial Topics 2024
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CashPal TeamLast updated 19 July 2024
1. Reserve Bank rate adjustments
The RBA’s cash rate adjustments were a major focus in 2024. After a series of hikes to combat inflation, the rate was expected to fall by 150 basis points by year’s end — lowering borrowing costs across mortgages, credit cards and personal loans to stimulate growth. The cash rate — the interest rate on overnight loans between financial institutions — is the benchmark for most other rates, so RBA moves influence the overall cost and availability of credit.
Lower rates cut borrowing costs (cheaper mortgages, car loans and personal loans), encourage spending, and open refinancing opportunities for existing borrowers. The trade-offs: lower returns on savings accounts, and the risk of reigniting inflation if rates fall too quickly.
2. Cooling inflation
Inflation, a significant concern for years, continued cooling in 2024 — crucial for consumers and businesses, since stable prices ease budgeting and reduce the real weight of debt repayments. Contributing factors included supply-chain improvements post-COVID, the RBA’s aggressive earlier rate hikes, and declining energy prices. The benefits: more stable everyday prices, improved purchasing power, and room for the RBA to lower rates. The caveats: if wage growth doesn’t keep pace, consumers still feel pressure, and rapidly cooling inflation can signal an economic slowdown affecting jobs and income.
3. Student loan debt relief
New policies aimed to lighten the load for student borrowers: HECS-HELP adjustments with more favourable repayment terms and higher repayment thresholds, new income-driven repayment plans with shorter time-to-forgiveness for smaller balances, and bankruptcy law changes making student loans easier to discharge. For borrowers this meant reduced monthly payments, potential debt forgiveness, and improved financial stability — though not all borrowers qualify, application processes can be complex, and the measures don’t address the underlying rise in education costs.
4. Record household debt
Household debt reached record highs in 2024, complicating the financial landscape for many families.
What's driving it, and the impact
Mortgage debt remains the largest component, driven by rising home prices and interest rates; credit card balances grew as consumers leaned on credit for everyday expenses; and personal loan debt continued rising with higher borrowing costs. High debt levels create financial stress from juggling multiple payments, limit the ability to save for emergencies or retirement, and can damage credit scores, making future borrowing harder.
Strategies for managing debt
Debt consolidation — combining multiple debts into a single lower-rate loan — simplifies payments and reduces overall interest. Creating and sticking to a budget helps prioritise repayment, and free financial counselling provides valuable strategies for households under pressure.
5. Personal loan trends
Personal loans remained popular in 2024 — used to consolidate high-interest debt, finance home improvements, or cover unexpected expenses. Despite rising interest rates, demand stayed strong. Balances reached record highs with larger average loans, rates increased in line with the broader credit market, and delinquency rates also rose — with a significant portion of personal loans more than 60 days past due, underlining the need for responsible borrowing and effective debt management.
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