According to the annual Finder Credit Card Report, 13 per cent of people with plastic – the equivalent of 1.8 million Aussies – have missed a recent repayment due to rising cost-of-living pressures.

The financial comparison website’s research showed eight per cent were 30 days late, four per cent had missed a repayment by 60 days, and an alarming two per cent were more than 60 days behind.

“Missing a payment will usually incur a late fee and interest charges and these costs can quickly add up,” finder.com.au credit card expert Amy Bradney-George said.

On top of the financial cost, Ms Bradney-George warned of a longer-term risk that could subject Aussies to a “debt disaster”.

“You only have 14 days’ grace before it will be recorded on your credit file that your repayment was late.

“Details of the late payment can stay on your credit report for two years, and while a single late payment is unlikely to affect your credit score at first, if you continue to not pay it or miss more payments it could have a serious impact.

“This can lead to higher interest rates on loans and make it harder to get approval for a new credit card or loan in the future.”

More than 13 million credit cards are currently active in Australia, with a combined interest-accruing debt of $18.1 billion, she said.

Money.com.au’s credit card expert Brad Kelly said the average credit card holder performs 22.7 transactions a month, typically spending $115 each time, and has a balance of $3043.

And following a brief lull during Covid, Aussies are swiping more than ever, spending almost $35 billion each month – 20 per cent higher than before the pandemic.

Experts say this increase is an indication of how reliant households are on credit to meet escalating cost-of-living pressures.

“It’s so tough right now and strain from the rising cost of living is starting to cause some long-term damage to people’s finances,” Ms Bradney-George said.

Credit history blemishes can’t be removed, even though some companies claim to be able to “fix” or “clean” an undesirable record.

“You cannot remove information that is correct from your credit report, even if it is negative information,” financial comparison website Canstar confirmed.

“Additionally, in many cases, these companies charge high fees for something you can do yourself for free – such as fixing an error on the report.”

Serious infringements can remain on a credit history for seven years and payment defaults for five years, making dealing with lenders a tricky prospect.

And as Canstar revealed, even paying off old debts won’t remove the information.

“However, if you pay the debt, the credit provider should update your details to show it has been paid. Lenders may look at paid defaults more favourably than unpaid defaults. However, it’s still important to remove defaults if they were incorrectly listed in the first place.”

According to Moneysmart, there are several ways to gradually improve a credit score. They include lowering credit card limits, limiting the number of applications for credit made, meeting rent and mortgage repayment dates, and not missing bills.

“As you do these things, your credit score will start to improve. So, you’ll be more likely to be approved next time you apply for a loan or credit.”

Ms Bradney-George said relying on credit cards to meet living expenses can be convenient, but warned that disaster can hit if holders aren’t careful.

“Ideally, you want to pay off the total amount you owe each time you get a statement,” she said.

“If money is tight, you also have the option of paying just the minimum amount listed on your statement. As long as you pay that by the due date, you can avoid late payment fees. But the more you can pay off the balance, the better.

“Many credit cards also offer instalment plans for new purchases or for a part of your balance, which can help space out payments over a structured period of time.”

And it’s crucial that customers let their lender know if they are going to miss a payment.

“If you are upfront, you could get access to hardship arrangements which can give you flexibility around meeting repayments with fewer long term consequences.”

If you need help, you can contact a free financial counsellor or community legal centre to assist you. You can speak to a financial counsellor by calling the National Debt Helpline on 1800 007 007.

Moneysmart also provides a list of organisations that can provide free legal advice to people who are in debt.