Credit Card Spend - 10 Year Low

During April this year, credit card spending crew at the slowest rate seen in over ten tears. Recent statistics would indicate that as consumer struggle with increasingly high rates of interest, along with the vastly increased price of food and fuel, are the predominant reasons for this slump in the credit card industry.

Statistics were down across the board, including overall spending, accrued credit charges, and the size of credit card balances. Average balance for credit cards is often used as a yardstick indicator within the creditor industry, and this April saw just a 5.2% rise across the last 12 months, the slowest rate of increase for over 13 years.

Mr Savanth Sebastian, a CommSec equities economist has been keen to point out that it is fairly obvious that with interest rates running at their highest in the last 12 years that credit card consumers were "taking heed of advice to keep debt in check". It does appear that those types of purchasers most likely to add the acquisition of goods and services to their open credit card balance, are beginning to try and keep debt levels to an absolute minimum level.

It is unclear how long this trend will continue, although it is generally agreed that until the world economy shapes up once more, then the Australian lending market and especially credit card providers will continue to struggle with falling use as interest rates continue to climb. The increased cost of required commodities such as food is beginning to force credit card users to think carefully before making any possibly superfluous purchase. A particularly nasty scenario that has been aired is that of fuel and food prices becoming so steep that the population begins to purchase these staples of everyday life on their credit cards. A potentially good thing for the credit providers but a disaster for the Australian economy in general.