Bank SA: Australians concentrating on repaying credit card debt

Australians attempting to repay debts spend less, according to the Bank South Australia (Bank SA).

Australians are acting with spending caution and trying to repay their credit cards, according to Bank South Australia (Bank SA).

Its latest state monitor said confidence in purchasing had dropped compared to the previous six months.

Managing director Rob Chapman said people are now concentrating on other things rather than spending.

He added: "Consumers are still being careful, which is not surprising given the volatility in the economy over the past two years as the world went through an economic crisis."

The organisation – which offers the BankSA Platinum Credit Card among others – pointed to three consecutive interest rate increases towards the end of 2009 as possible reasons behind the change in consumer confidence levels.

Export earnings and falling commodity prices are two other factors it considered.

This report comes after Savanth Sebastian, a CommSec economist, said a three per cent rise in credit card balances in December 2009 was the strongest in more than a year, the Australian Associated Press reported.

By Kate Guthrie