Australians credit cards debt lowers in April
19 June 2009
The latest report documenting the spending habits of Australians on a monthly basis has found that credit cards balances declined for the first time in fourteen years, which is when the report commenced, in the month of April 2009.
The report released by the Reserve Bank of Australia concluded that Australian consumers actually spent 7.5 per cent less on their credit cards in April than in March 2009, spending $17.376 billion. This breaks the predicted result after March was actually 9.6 per cent higher than credit cards expenditure in February.
The average credit cards balance declined by an annual 1.2 per cent to $3,080 in April.
This response from credit cards users is obviously linked with the Global Financial Crisis with many Australians now limiting their credit cards use. Experts say that this cautious trend is ideal in the current economic times, and will be especially helpful as the market stabilizes. Also believed to be impacting on this trend is the unemployment forecast that the rate will rise from 5.7 per cent to peak at 8.5 per cent in late 2010.
While spending dropper to its lowest level to date, credit cards repayments did decline by 7.9 percent to $18.168 billion in April with use of the cash advance option also declining due to the high interest rates associated. The rate of cash advances actually slipped by a significant 10.9 per cent to 2.377 million in April, which is the lowest in 11 years.
Analysts have stated that consumers appear to be switching from credit cards to debit cards during the financial crisis with debit cards use climbing 31.86 percent.
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