People taking 'cautious approach to debt'

The number of debit card transactions is outstripping those conducted on credit cards, it has been revealed.

Australians are being more cautious about the way in which they manage their finances, new research indicates.

In figures released by the Reserve Bank of Australia (RBA), increases in the use of debit cards were revealed to have outstripped that of credit cards.

The Australian banking study indicates the number of credit card transactions rose 3.8 per cent in 2008-09, compared to growth of 14.7 per cent for debit cards.

Such growth was also attributed to the debit card's position as being the best way to access the government's financial stimulus payments made earlier this year.

"There is some evidence that consumers have taken an increasingly cautious approach to debt," the RBA notes.

However, the average value of credit card transactions were shown to be around double that spent on debit cards, though those taking out a card offering an interest free period on purchases could help people to spread out the cost of repayments.

Such comments come as Paris Dean, a sales assistant at Witchery, recently told AdelaideNow that people in the city are "more willing" to use their credit cards to fund retail purchases.

Posted by Emma North