High dollar leads to increased credit card spending

The current high value of the dollar has been cited as a major factor behind a slight increase in the number of Aussies buying goods on their credit cards in January.

According to the Westpac-Melbourne Institute Index of Consumer Sentiment, more people have been flashing their plastic in the past few weeks, but confidence levels are still fragile.

The index grew by 2.4 per cent to settle on 97.1 for the month, but a figure underneath 100 is still deemed to represent more pessimism than optimism.

Chief economist at Westpac Bill Evans suggested that the high dollar has encouraged people to buy big household items, while recent interest rate cuts have also had a positive impact.

However, he added that fears over job security and the rising cost of living have offset much of the positivity, ABC News reports.

A recent study by the Sunday Telegraph showed that more credit card users are taking advantage of the desperate nature of Aussie retailers by successfully haggling over the price of certain products in order to secure a bargain.

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