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Australian consumers cut credit card spending, increase savings

126px-RBA_logoRecent data revealed that Australian consumers have begun to pay down their credit card debt, spend more with debit cards and put more money into savings.

The Reserve Bank of Australia released data that indicates that credit card balances have fallen by 2.3 percent for the year ending in November, while many economists estimate that the national savings rate has increased to a 30-year high of 10 percent, Money-AU reports.

A survey by Dun & Bradstreet Consumer Credit Expectations also found that household debt expectations fell to 18 percent for the first quarter, compared to 22 percent and 26 percent in the last two quarters.

“Overall, we’ve witnessed a sizable shift in the spending behavior of the Australian consumer,” Dun & Bradstreet CEO Gareth Jones said, according to Money-AU. “There is a greater degree of consideration being applied to each spending decision and a greater focus on spending within our means. This attitude towards spending, especially on discretionary items, can have a negative knock-on effect for Australian businesses. The upside to this ongoing mood of consumer conservatism is that we may see an improvement in the levels of personal debt and delinquency, which should help those households experiencing financial stress.”

While the number of Australian consumers using a credit card has increased to the highest level in three years, 55 percent of respondents in the survey indicated that they did not expect problems in meeting their financial obligations over the next three months, a seven percent increase from the fourth quarter of last year.

“If there is no slowdown in the next year or two, the current financial circumstances of consumers suggests they will be well placed to underpin ongoing strong growth in consumption and other spending,” Stephen Koukoulas, an economist who advises Dun & Bradstreet, said, Money-AU reports.

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