Aussies 'may be in for a big headache'

Mozo

Friday 17 October 2008

Aussies who have borrowed too much on cheap credit cards and low-rate personal loans may be in for a financial headache in the months to come, one expert has warned.

In a special report investigating the effects of the current market crisis on the average Aussie, news.com.au has noted that during 15 years of economic boom, many consumers have been happy to spend away on credit cards and loans.

However, Commsec economist Savanth Sebastian told the paper that when times get tough, many consumers may find it a struggle to keep their bank account statements looking healthy.

“For many years in Australia we have not had healthy spending … [It’s been] like a party and the more you just keep drinking and drinking the bigger the headache is when the party stops,” he warned.

He explained that as cheap credit cards dry up, people are going to have to start ploughing money into savings accounts to keep their head above water in the financial storm.

Singing a more positive tune, Deutsche Bank money expert Tony Meer has told the Herald Sun that the $10.4 billion cash injection announced by prime minister Kevin Rudd would go some way to helping restore consumer confidence and help prevent businesses to stay afloat.ADNFCR-1761-ID-18831918-ADNFCR

Compare today's top savings accounts

Back to top