Almost three-quarters (70%) of Australians are said to suffer from poor credit habits, according to a new report from ME Bank. A survey of 1,000 credit card holders across the country found that 70% of Aussies exhibited at least three of seven behaviours that would reflect badly on their respective credit ratings. Millennials throughout Australia are therefore being encouraged to use these findings as a wake-up call to a responsible use of credit in all its various guises.

The most common habit with a negative effect on personal credit ratings is a failure to set up an automatic transfer or direct debit to pay off their credit card balance in full every month. 75% of respondents said they have never adopted this approach. More than two-fifths (42%) of Australians have also admitted to having credit card debts as well as savings, but preferring not to use their savings to pay off their credit card, needlessly accruing interest instead.

Almost a third (32%) of respondents said they only repay the minimum monthly amount on their credit card balance. Given that minimum payments amount is just 2-3% of a consumer’s overall credit card balance, this means that 98% of their remaining debt is accruing interest in the meantime. A lack of education for Australian millennials could be a major issue. A bit over 40% admitted they were unsure which credit card to pay off first when they have multiple cards with variable interest rates.

This report was commissioned by ME Bank to underline the importance of card issuers educating their customers and helping them to avoid becoming embroiled in negative credit card habits and unnecessary household debt. Michael Hendricks, general manager of cards and payments, ME, said: “Banks could be doing more to educate credit card customers on how to choose and how to use credit cards”.

There will, of course, be instances where young adults unknowingly adopt negative credit card habits due to a lack of education. Even the small matter of not being on the electoral roll can have an influential impact on an individual’s credit rating. Educating millennials on the consequences of defaults on credit repayments is also essential, as this can increase an individual’s risk profile in the eyes of mortgage lenders; preventing people from moving house.

Of course, as millennials grow older and wiser with their money, they’ll need a chance to prove that they are more responsible with credit in order to improve their long-term credit history. Bad credit lending is therefore on the rise, offering those with a history of multiple defaults a lifeline to improve their credit rating and still enjoy financial freedom. The big difference about bad credit lenders is that they don’t consider how low an individual’s credit rating may be. Instead, they assess their credit application based on their monthly income and expenditure using recent bank statements.

Although a bad credit loan might carry lower limits than usual, it can be a great opportunity to demonstrate a commitment to meeting loan repayment schedules. This, in turn, can help individuals obtain better credit deals in the future, empowering them to reshape their financial behaviour. All this is possible, as long as they maintain good financial discipline.