In this literature review we detail current knowledge about how people decide on personal debt in Australia, with particular reference to low income families. These readings form the starting point of our study of Families at Risk Deciding on Personal Debt. The aim of our study is to understand financial decision-making so that we can address what needs to be done to empower consumers and alleviate debt problems amongst the most vulnerable families in Australia. This literature review on personal credit and debt in Australia complements the accompanying literature review on the theoretical frameworks and literature around the study of personal debt and credit. These literature reviews do not include a detailed discussion of consumer education as this will form the subject of a separate report.

The literature on personal debt in Australia is sourced from consumer bodies, regulators and academia. This review has benefited from the input of consumer organisations and hence brings together literature that is not always accessible. All agree that more research is needed, particularly on financial decision-making. Our literature survey shows the main gap lies in the study of the social and cultural dimensions of debt, credit and decision-making. With the inclusion of the social and cultural perspectives, financial decision making no longer remains an individual, economic issue. There is a further need to measure the impact of these cultural factors so that they can be part of models of consumer behaviour that are beginning to underlie strategies regarding financial literacy, provision of credit and regulation.