Savings account holders 'still racking up debt'

Wednesday 01 December 2010

Article by Mozo

A large number of Aussie consumers make bad, and even irrational, financial decisions, new research has claimed.

Savings account holders 'still racking up debt'

According to a report by banking group Citi and the Australia Institute, one in seven people will run up credit card debts while also keeping a positive balance on their savings account.

The study suggested that in these situations, the net financial result is perhaps zero or less than zero as such consumers are apparently just "renting the idea of having a savings account" in order to make themselves feel better.

In addition, the research found that many Aussies are failing to compare savings accounts and other money products in search of their best options, with 56 per cent of respondents stating they did not know what interest rate they were earning on their savings.

Referring to "the overwhelming choice and complexity" that consumers are now faced with, Citi Australia head of community relations Louise Martin said: "Our lives are becoming increasingly complex so it's not surprising that people are making decisions in many different ways – some of the good, some not so good."

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