Credit card debt Australia is enjoying a stable increase, which is a very good sign for the Australian economy. Read this article to find out why.
While economic conditions are getting better, credit card debt Australia is rising along with the improvements. As the financial outlook improves, consumers are more willing to borrow money based on confidence in the economy.
Credit card debt Australia
Australians are willing to take on more debt, and while the crisis in global finance was a reminder to everyone that debt could indeed be a bad thing, the willingness to incur debt is a positive economic indicator.
The economy is driven by the spending strength of Australian consumers, and credit card debt Australia is an important indicator of how well the economy is doing. The fact that consumer borrowing is on the rise means that job creation should rise as well and unemployment should go down.
Recently, the Reserve Bank of Australia released the latest statistics of credit card debt Australia, and the news was good.
The total charge card and credit card balances that were outstanding went down to $46.152 billion at a decline of 1.6% in January. In December it was reported as being $46.912 billion. This is a normal fall since the Christmas spending that took place in December is over. Also, the figures are not adjusted seasonally.
The news is tentatively good since the average change was 1.8% for the last five Januaries. This means that this January followed a normal trend, which followed a better six-month period.
Retail sales in the last half of 2009 picked up after the period in which cash handouts that were given to households stalled retail spending earlier in the year.
Credit card debt Australia has picked up and in 2009 the total outstanding debt growth was 5%. While this is a slower rate than the last five years, which had a rate increase of 11%, it is still an increase that indicates a recovery. In the first half of 2009 the rate of growth was less than 2%.
This shows that consumer confidence is at a higher level and that, along with a strong growth in employment, it is giving consumer spending the momentum it needs. This does not mean to say, however, that households are simply plunging into deep debt. Australians are using their credit cards more cautiously. The growth in purchase value remains under the norm at only 4.4% in 2009, compared to an 8.5% average during the past five years.
There was also a fall of 12.8% in credit card cash advances last year, vs a 2.8% average increase in the previous five years.
It is a growth that bankers like to see – a stable gradual growth in household demand. The Reserve Bank would prefer to see this rather than a spending frenzy, since an investment boom in business is on the horizon in the near future.
As the credit figures stand now, the indicators are that interest rates rising another notch would not desperately hurt the household sector. If the rise in debt occurs too quickly then a rate rise would be urgently necessary.
Credit card debt Australia is maintaining a slow gradual growth, which is a good sign for the economic forecast. This solid rise in debt is a good indication of economic progress in the near future.Back to top
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