'Determined effort being made' to pay off credit cards
Posted at by ifydcat on category CreditIt has been suggested that Aussies are showing strong determination in terms of managing their finances.
With growing concerns around the continuing economic downturn, people are losing their “big borrowing ways”, Karina Barrymore, writing in the Courier-Mail, states.
Consequently, there has been a greater focus on repaying debts owed on credit cards and other forms of personal borrowing, as Ms Barrymore points to figures published by the Reserve Bank of Australia (RBA) showing the typical outstanding credit cards fell by one percentage point over the course of April to stand at $3,080.
Further signs of the overall move to get on a firm fiscal footing can be seen as the RBA reveals the average balance is down 1.2 percent on an annual basis, the first year-on-year fall recorded since 1994 after the bank started publishing data relating to credit card debt.
Meanwhile, the value of cash advances is down 15 per cent from the same time 12 months ago.
Harry Senlitonga – an analyst for Canstar Cannex, commented on the Reserve Bank’s figures, stating that there is a “distinct trend of consumers shying away from credit cards”.
He adds that those who are in possession of credit cards appear “to be making a determined effort to pay down debt”.
Indeed, those who are looking to get tighter control of their finances could well find that a credit card balance deal offering an interest free period on debt shifted across could prove to be of assistance.
Meanwhile, director of the Consumer Action Law Centre – Nicole Rich, said “it is good” that measure designed to reduce detbs are being taken, although lenders are continuing to tempt in new customers through attractive credit card deals in an effort to make them borrow.
The head of investment strategy and chief economist for AMP Capital Investors – Shane Oliver, told the Australian earlier this month that despite lenders dropping rates on home loans since the RBA cuts, they have avoided fully passing on falls in line with their credit cards due to fears that defaults will increase during the turbulent financial climate.