Consumers 'wary of credit cards'

People are looking to use cash and debit cards, rather than credit cards, in the build-up to Christmas, one financial expert claims.

A cautious approach to Aussie credit is currently being taken, it has been reported.

Speaking to the Australian Associated Press, CommSec economist Savanth Sebastian points out that people are wary about using their credit cards to fund their Christmas, due to concerns about taking on more debts.

Instead, he notes that people prefer to spend using either cash or debit cards, with such an Australian banking trend set to remain in place into 2010.

And although consumers have a more positive view about the economy than they did 12 months ago, it will be some time yet before there is a willingness to increase personal debt levels.

"That will come when the economy gains traction, when commodity prices rise and when incomes in Australia start increasing," Mr Sebastian claims.

However, ANZ Banking Group chief executive Mike Smith noted that there has been a slight rise in demand for borrowing, although this has been curtailed slightly by recent interest rate rises from the Reserve Bank of Australia.

By Ashley King