Credit card use rising once more

The popularity of credit cards is up again, according to experts.

Using a credit card to pay for products and services has become a popular option again.

This is according to AAP, which said although last year saw a resurgence in debit card use, this Christmas has caused people to get out the credit cards once more and get the tills ringing.

Despite this trend, it does not signify an increase in spending - just a shift in habit, said ANZ senior economist Ange Montalti.

In addition, rising consumer confidence is causing more and more people to hit the web and compare credit card prices, seek out the best deal and use it to their advantage, the news agency suggested.

But Chris Richardson of Access Economics said the peaks and troughs seen in credit card popularity do not necessarily mean it will be a bank-busting Christmas down under.

He described it as likely to be "modest" in terms of retail performance, because some shoppers are likely to be much more conservative than usual with their choices.

The comments follow a recent article on news.com.au, which looked at some of the ways people can be savvy shoppers this festive season.

It recommended using a debit or credit card to conduct some online shopping, as well as calculating the full amounts you want to spend on each loved one.

"Preparation is the key to having a financial-stress-free Christmas. Make a list of who you would like to buy for and then work out how much you want to spend on each of them," the publication said.

It also suggested looking at the fine print of credit card agreements to ensure limits and rates are completely understood. Interest free periods should be adhered to and considered in terms of new year repayments.

Setting an automatic bank account payment to start chipping away at a credit card balance could be a useful way to start 2010.

Posted by Emma North