Consumers more optimistic after RBA rate cut

The latest Reserve Bank of Australia (RBA) interest rate reduction has boosted consumer confidence, which may result in more people opting to spend money on their credit cards.

According to the Westpac Melbourne Institute Index of Consumer Sentiment, there was a 6.3 per cent rise in November month-on-month.

The report revealed that the number of people who said they were optimistic now outnumbers the number who are pessimistic.

Bill Evans, Westpac chief economist, forecast that the next interest rate cut will be next year rather than in December.

"Our call remains that the next move will be 25 basis points in February with a further 50 basis points in cuts over the course of 2012," he said.

With consumers showing signs of growing confidence, there might be an upturn in spending on debit and credit cards in the run-up to Christmas.

Last month, founding director of financial planning firm ipac Paul Clitheroe said in his company blog that Aussies should draw up a budget ahead of the festive season so can manage their spending effectively.

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