Plastic Is Less Fantastic

Let’s take a look at how credit cards are stacking up this month

New figures from the reserve bank show that credit card usage has fell by 7.5% in April. The main reason behind this is unknown as banks scramble for new advertising platforms to boost credit card sales in the second half of 2009.

This slump may be attributed to the credit crunch with consumers not splashing out on luxury items; however the number of credit and charge accounts increased by 54,000 in April, while the number of purchases using credit cards fell by 5.3 per cent. The big four banks are finding that repayments are being made quicker this month with a 2.3 percent increase in payments last month. These figures seem quite odd to the average bank as consumers spending patterns are becoming harder to track in this glooming economic world.

A slump in credit card use is odd following the hand out of the Federal Governments stimulus package that should have seen a rise in consumer spending. On the other hand, banks have also been criticized for not lowering credit card rates as expected. Maybe this is the start of consumers fighting back against banks in an unprecedented attack? The actual number of cash advances is still waiting to be released with some expected interesting figures. EFTPOS purchases are down 6% on last month. The federal government expects the retail sector to boom this Christmas meaning credit cards will be a hot topic towards summer as people struggle to pay for that extra present. Total credit card repayments are up 3.6% this year, compared with an average of 10.8 per cent looking at the previous 5 years.

So, in an unknown financial world will credit cards still have their place in the average home?

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