 Credit card repayment is now leading household debt
Credit card debts have exceeded mortgage debts for the June quarter, reports the Melbourne Institute's Household Saving and Investment. This new research shows that credit card repayment is now the main form of household debt.
According to Edda Claus of Melbourne Institute this result is a concern.
"I would think this is not a good thing because interest rates on credit cards would tend to be quite high," Edda says.
On the other hand, Claus says the household finances are in better shape now than they were during the first quarter of this year. The report shows the financial conditions index climbed by almost five points to 33.7 this June.
In March 46 % of households are saving their income, and it now increased to 49%.
Savings rates increased noticeably during the financial crisis, one reason is that people are saving because they were fearful they might lose their job," Claus explains.
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