One-third of Australians expect to experience difficulty meeting their credit commitments over the next three months, new survey data show.
Research and market intelligence firm Dun & Bradstreet conducted its national online Consumer Credit Expectations survey of 1,200 adults ages 18 to 64 in March, examining their expectations for credit applications, credit card use, and spending and debt performance.
It found that 38% of respondents anticipates having to use their credit card to cover otherwise unaffordable expenses, while almost 27% were planning to apply for a new “credit product,” which could include a credit card, debit card, mortgage, personal loan, loan for a rental property or investment, a credit-limit increase on their card or a mobile-phone contract.
Moreover, 34% of Australians anticipated having difficulty meeting their credit commitments, while 50% believed a rise in interest rates would have a negative impact on their finances.
Mrinalini Manral, an independent banking analyst based in India, says the survey’s findings suggest that, while Australians have an appetite for credit cards, they are concerned about their rising debts. “It would be safe to say that the survey found that Australians have doubts on their capacity to manage debt in a market with rising interest rates,” she says.
In a note accompanying the survey report, Dun & Bradstreet CEO Christine Christian said the data reveal that many Australians are using credit in ways that may eventually harm them, and she expects interest-rate increases later in the year could trigger distress for many households.
According to the report, of the 27% of respondents who expected to apply for new credit products, 8% expected to apply for a new credit card, and 6% expected to apply for a credit limit increase on their card account.
Also, the demand for a new credit card was higher among men than women, at 10% and 6% respectively, while 14% of respondents between the ages of 18 and 34 expected to apply for a new credit card. By comparison, only 5% ages 35 to 49 expected to do so.
Moreover, 8% of respondents ages 18 to 34 and 7% ages 35 to 49 were more likely to be planning to apply for a credit card limit increase in the next three months, compared with just 2% ages 50 to 64 who were.
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