Personal loan uptake falls as Aussies tighten their belts
With Christmas fast approaching, one could be forgiven for thinking that Aussies will be splashing the cash left, right and centre in the next few weeks.
However, it seems that people will adopt a far more cautious attitude in the build up to this festive season and retailers could be disappointed when they count their profits come January.
This increasingly frugal approach is reflected in the low demand for personal loans across the country.
New figures released by the Australian Bureau of Statistics have shown that personal finance commitments fell by 3.3 per cent in August 2012 when compared with the previous month.
Although the uptake of fixed lending services only dropped by 0.6 per cent, the demand for revolving credit deals declined by 6.9 per cent.
A study conducted by the Reserve Bank of Australia last week also highlighted a downturn in credit card debt in August, the News Limited Network reports.
It is clear that Aussies are still not confident enough to borrow money from the banks at the moment, despite the national cash rate being at a three-year low.
Dun & Bradstreet's latest Consumer Credit Expectations Survey emphasised this point, as it found that an extra 29 per cent of the population are more inclined to save money this Christmas than they were last year.
The study also discovered that 56 per cent of Aussies are worried about the state of their finances.
Tellingly, 37 per cent of households are less likely to cover the cost of their festive gifts with a credit card in 2012.
"An increasing number of Australians are concerned about their financial security and this is weighing heavily on their plans for the Christmas period," commented Dun & Bradstreet general manager Danielle Woods.
"Prioritising saving over non-essential spending is a positive for the balance sheets of Australian households and the Reserve Bank is certainly encouraging this behaviour, in light of uncertain employment conditions," she added.
With this in mind, it seems that businesses will have to work extra hard to attract customers over the next couple of months.
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