Australian consumers are putting their credit cards away in the lead up to Christmas.
According to the Dun & Bradstreet survey of Consumer Credit Expectations, nearly two thirds of consumers will use their own savings to pay for additional expenses in the December quarter. Dun & Bradstreet CEO, Christine Christian, said that Australians seemed to be turning away from the annual Christmas credit splurge.
“Economic uncertainty and financial instability appear to be influencing increasingly conservative behaviour from consumers. Ordinarily, we would expect borrowing to rise more dramatically around Christmas time, but these results would indicate otherwise,” Ms Christian said.
The survey, which focuses on Australians’ expectations for savings, credit usage, spending and debt performance, also found that only 20 per cent planned to apply for new credit, down from a peak of 33 per cent in mid 2009.
In addition, the number of consumers applying for a credit limit increase has halved since the beginning of last year. This correlates with findings that many consumers will avoid holiday spending altogether, with more than half saying they had no plans to make a major purchase over the next three months. Of those planning a major purchase, 82 per cent said they would use their savings.
Significantly, the survey recorded a 25 per cent fall in the proportion of consumers anticipating having extra money in the lead up to Christmas. These expectations are flowing directly through to behaviour with more than a quarter saying they would either pay down debt or increase savings, while only 5 per cent said they would spend or invest it.
To read the story click on the attachment: Consumers cautious heading into Christmas 2011
