Consumer Confidence Rise, Aussies Prudent with Credit Card Usage

Consumer confidence is rising in Australia

Although recent figures from the Reserve Bank of Australia shows that transactions on credit card usage have been rising, it seems that Australians are still cautious about increasing any debt on their cards. Consumer confidence is returning following the global financial crisis, but a lot of people still hesitate to add to the debt on their credit card.

Credit card usage is up

In February, the total value of transactions, according to the Reserve Bank of Australia, rose 6.05%. The average account balance on credit cards also increased to $3250 in February, which is a 1.9% increase. This is 3.29% higher than it was a year ago. According to the Reserve Bank of Australia, the total value of charge and credit card transactions was $18.2 billion in February. This includes purchases and cash advances.

Craig James, the chief economist for Commsec, said that there was a subdued growth in credit cards even though consumer confidence was rising as was Australia’s economy. Even with a recent rise in interest rates by the RBA this year, Australians still have a good outlook about the economy according to a consumer sentiment survey released by the Westpac-Melbourne Institute for April.

Consumers are still very cautious when it comes to adding that to their credit card, but consumer spending behavior is on the rise. It is increasing smoothly, and this can be interpreted from average credit card balances in Australia.

Since the beginning of the financial crisis globally, there has been a dramatic change in the way consumers spend their money. Just a couple of years ago Australians were spending more than they could afford and living on credit.

While credit card usage has been on the rise more gradually, the use of debit cards has increased significantly. People are more likely to use their cash rather than put everything on credit. Over the past 12 months there has been a 30% increase in the usage of debit cards. That is much higher than the 6.69% increase for credit cards.

Debit cards allow a consumer to use their own money to make purchases but still have all of the accessibility that a credit card has. Australians are still choosing to use money on hand instead of borrowing.

Australians are still prudent when it comes to credit card usage even though consumer confidence is on the rise. The growth of debit card usage is a clear indication of how Australians feel about credit.

Comparison of our Top Credit Card Offers

		Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual Fee	Cash Advance Rate (p.a.)
Citibank Clear Platinum Card	A low interest rate offer on balance transfers and purchases	11.99%	2.9% for 12 months	$99	21.74%
St George Vertigo	An introductory offer on balance transfer and a low annual fee	13.24%	0.99% for 12 months	$55	21.49%
Virgin Flyer Credit Card	Earn 1 velocity point per $1 spent, plus an introductory offer on balance transfers	20.99%	1.9% for 9 months	$99	20.99%
Westpac 55 Day Credit Card	No annul fee for the first year with a low rate on balance transfers and purchases	0% for 5 months (reverts to 19.59% )	3.99% for 6 months	$0	21.49%
ANZ Frequent Flyer	An exclusive bonus points offer, Plus extended warranty, overseas travel and medical insurance,90 day purchase security insurance.	19.74%		$95	20.99%