Consumers turning their backs on credit cards

Australians are reining in their spending in the financial crisis, with new data from the RBA indicating that consumers spent 7.5 percent less on their credit cards in April than in the previous month.

Credit card balances have fallen for the first time in 14 years, a sign that Australians may be reluctant to use their credit card because of worries about the economy.

According to Commsec economist Savanth Sebastian, consumers continue to remain cautious, “shunning debt at every opportunity.”

Many consumers are now also shunning credit cards, in favour of debit cards so they can control their spending more easily.

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