MORE FAMILIES LIVING ON CREDIT, SURVEY FINDS

MORE FAMILIES LIVING ON CREDIT, SURVEY FINDS

A GROWING number of Australian families are turning to credit cards to cover increasing costs of living.

With rising unemployment and soaring petrol and utility prices, 41 per cent of households with children now rely on credit cards to cover daily living expenses up 2 per cent since late last year according to the survey by finance consultancy firm Dun & Bradstreet.

The survey found the majority of Australians still prefer using cash savings to make major purchases, but still flash their plastic increasingly to cover everyday expenses including groceries.

An estimated 15 million credit cards are in circulation across the country with a further 36 million debit cards used on a regular basis.

The average Australian credit card balance is around $3300, with credit and charge card users collectively owing nearly $50 billion from outstanding transactions according to the Reserve Bank of Australia.

Although interest rates have remained stable in recent months, a third of families say they struggle to manage existing debt levels, with 25 per cent admitting they would forego a mortgage repayment if they ran short of cash.

Not surprisingly, lower income households are feeling the most pain.

Nearly half (46 per cent) of all low-income households expect difficulty in managing existing debt, an increase of eight percentage points since the end of last year and 11 points above the national average.

A third of all lower income households expect the situation to worsen in coming months.

Electricity bills and pay-TV accounts were nominated as the first bills most likely to go unpaid by families under economic hardship.

Despite the increasing financial strain, more than a quarter of all families say they are considering taking on another credit card or seeking an increase in existing credit limits to help cover rising household costs. 

Get our daily business news

Sign up to our free email news updates.

Please tick to verify that you are not a robot

 

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Australian Millennial managers look to offshoring to solve global talent shortage problem
Partner Content
New research reveals that more than half of Australia’s next-gen leaders are cons...
Cloudstaff
Advertisement

Related Stories

Fintech Paypa Plane to double team size after securing $10m in Series A backed by Mastercard

Fintech Paypa Plane to double team size after securing $10m in Series A backed by Mastercard

Brisbane-based cloud payments software provider Paypa Plane has rai...

What can we learn from the collapse of Porter Davis Homes Group?

What can we learn from the collapse of Porter Davis Homes Group?

Today was a dark day for the Australian construction industry with ...

Infrastructure builder Lloyd Group goes bust amidst "eroded project margins"

Infrastructure builder Lloyd Group goes bust amidst "eroded project margins"

After 44 years in business as a family company that started in Melb...

Another home builder collapses as Porter Davis calls in liquidators

Another home builder collapses as Porter Davis calls in liquidators

A home builder that was forecasting $555 million in revenue this fi...