Credit and debit card spending rises in September
Article by Mozo
Aussies used their debit and credit cards far more frequently in September, according to a new study conducted by Commonwealth Bank.
The company's Business Sales Indicator (BSI) tracked card payments made at the bank's point-of-sale terminals throughout the month and the data highlighted a seasonally adjusted 3.9 per cent upturn in spending activity.
This was the largest monthly rise in four and a half years and card use is up by 6.9 per cent when compared to the same point in 2011.
So why have Aussies been splashing the cash so readily all of a sudden? Surely it is too early for people to be doing their Christmas shopping?
The truth is that economists have found it hard to put their finger on exactly why credit card holders have rediscovered their confidence.
Numerous studies have suggested that people have been keen to reduce their credit card debt, with many learning a harsh lesson when the global economic downturn took hold a few years ago.
Chief economist at CommSec and author of the BSI Craig James said the economy has been "patchy" and it is difficult to gauge when credit card spending may rise and fall.
"Over the past five months, we have seen fluctuating peaks and troughs in consumer spending," he remarked.
"Hopefully the recent interest rate cut in October will spur consumer confidence and continue spending momentum in the lead up to Christmas."
Although some experts have warned about a possible downturn in the mining sector and overall economy, it seems that Aussies are generally happier with the state of their finances than they have been in previous months.
This point was recently emphasised by an ING Direct study, which indicated that overall confidence levels are at their highest point since the second quarter of 2010.
Almost half of the survey respondents are ahead with their mortgage repayments and more people have been putting money aside for a rainy day.
Indeed, the average savings pot now contains $9,735, the study found.
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