Credit cards still in high use despite stimulus package payments
22 April 2009
Credit cards users are already accumulating more debt on their credit cards despite the first round of the federal government's December stimulus package payments have been received. As it stands now, credit cards debt has reached a record $45.4 billion according to the Reserve Bank of Australia's latest data.
The federal government commenced payments from its stimulus package in March in the hope to encourage consumer spending and raise economic activity in order to stave off the impending recession. The stimulus package has seen the majority of Australians receive cash payments of up to $950 from Centrelink or the Australian Taxation Office.
However, the RBA data illustrated that credit cards users had repaid a fairly minimal $16.8 billion of outstanding debts in February, the lowest on record. In the same month, credit cards spending were $17.1 billion.
Previous months spending and repayments in January 2009 were $16.6 billion and $18.1 billion respectively. December 2008 saw credit cards users repay a massive $21.5 billion, although spending was also high at $21 billion during the Christmas period.
During the December 2008 period, there was the Federal Government's first economic stimulus package which saw pensioners, carers and low-income families receive payments totaling $10.4 billion.
Australia's dependence on credit cards has always been prevalent, with the Reserve Bank of Australia finding that total debt owned by Australians has risen six-fold in the 18 years from 1990 to 2008, with credit cards debt taking up a significant proportion.
The first round of stimulus package payments from the $12.2 billion has begun rolling out with the money allocated towards providing a much needed financial boost to households and support economic growth. The payments will be broken up into installments of either $900 or $950 payments based on whether recipients receive the $900 Single-Income Family Bonus and/or the $950 Back to School Bonus with smaller cash amounts allocated depending on a case-by-case basis. For a detailed breakdown of the stimulus package payments, click here.
The Federal Government is encouraging recipients of the stimulus package payments to invest back into the economy by spending the payments on local businesses and giving the economy a much need boost to stave off the recession.
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