currently at a 12-year high, consumer credit card spending has
fallen to its slowest annual growth level since 1994, when the
Reserve Bank of Australia (RBA) began keeping records.
reached A$3,115 ($3,041) in May 2008, an increase of 4.1 percent
from the previous year but the slowest annual average growth rate
since 1994.
Cash advances on credit and charge cards havealso proved less popular over the past 12 months, as consumers
struggle with the soaring cost of fuel and household items. The
number of transactions fell 1.3 percent in April 2008, while the
value of those transactions also dropped by 2.1 percent. Over the
past year, the number of cash advances made on credit cards in
Australia has declined by 6.5 percent.
spending has been the continued rise of impaired assets, which
reached A$7.29 billion in the first quarter of 2008 – a staggering
68.5 percent growth over the year. This was more than double the
size of the previous largest quarterly increase of 31 percent back
in September 2001.
spent a record 13.9 percent of their disposable incomes in the
first quarter of 2008 paying off interest, a clearly significant
factor in the current spending downturn.
circulation has risen by 5 percent in the year to May. Outstanding
balances on credit cards are up by 10 percent from the same time
last year, as stories circulate about home buyers attempting to
avoid defaulting on their mortgage payments by putting them on
credit cards – a classic symptom of a stressed economic
environment.
Australian economy added to by a
bankruptcy rate that has just reached a record high for the past 10
years, banks are now set to assume far greater powers to examine
the finances of their customers under draft legislation that will
go before Australia’s Federal Parliament within the next few
months.
undertake credit history checks for lenders will now be allowed to
keep detailed records on individuals that detail their mortgage
repayments, credit card bills, personal loans and even phone
accounts.
New legislation under fire
Go deeper with GlobalData
While the drafted legislation has come under fire from consumer
groups as well as those concerned about privacy and the erosion of
civil liberties, banks have welcomed news of the new rules, citing
that at present they have no way of checking whether a prospective
customer is lying about their borrowing history.
reporting system where only a minimal amount of information is kept
on an individual’s file. This includes their name, address, details
of employment and a record of credit applications made over the
past five years as well as details of any defaulted payments,
bankruptcy notices and bounced cheques over A$100.
been strengthened by a report from the Australian Law Reform Commission, which has
recommended that lenders be made aware of current credit account
balances and limits, regularly updated payment histories and
details on both opened and closed accounts.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
