Australians’ high use of personal debt is, in part, attributable to the relaxation of the financial services regulation. There is concern that while debt has the potential to increase a person’s wealth, if used ineffectively it can have the opposite effect. This paper details a study of 680 Australians to ascertain whether their financial capability is related to the effective use of personal debt. The findings suggest that it appears people with greater financial capability are more likely to use debt effectively.