Aussies 'cautious about using credit cards'

Mozo

Friday 16 April 2010

Despite consumer confidence rising, many Australians remain reluctant to use their credit cards, it has been claimed.

Credit card machine content

Recent figures from the Reserve Bank of Australia showed that the total value of transactions on credit and charge cards rose 6.05 per cent in February 2010, while the average credit card balance increased by 3.29 per cent compared with the same month last year.

The growth of spending on debit cards rose at a higher rate than spending on credit cards, suggesting that people are more willing to spend cash they know they have in the bank rather than borrowing.

Speaking to the Herald Sun, Commsec chief economist Craig James said: "When you have a look at the average credit card balance, it does seem as though there is a bit more confidence creeping in.

"The balances are starting to rise on a smooth basis, on a 12-month average, but consumers are still very cautious."

However, in some cases, customers could find that using a credit card saves them cash.

A post on the Money AU blog recently highlighted that cash-back credit cards can be a good way to make savings while having easy access to their funds.

Card issuers will typically offer a cash-back rate of around one per cent to shoppers who use the card with participating retailers, the blog added.

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