Rise in middle-income people struggling with credit card noted

Middle-income earners are developing problems paying their credit cards and mortgages.

Increasing numbers of people on middle and high salaries are struggling to keep on top of their Australian banking commitments.

So claims David Bell, coordinator of financial consulting at counselling service CatholicCare, who told the Sydney Morning Herald recent months have seen a surge in consumers developing problems with mortgage and credit card repayments.

He says that instead of immediately getting in touch with their lender about the financial difficulties they are facing, borrowers will often go on to rack up further debts.

"People on middle and higher incomes have more financial literacy and should be able to make better decisions about how they handle their money. But when things are hard, everyone makes the same desperate choices," he claims.

First-time buyers are also making up an increasing proportion of those struggling with Aussie credit, according to Mr Bell.

Such comments come as Bank SA managing director Rob Chapman claimed people are less interested in spending and attempting to be more careful with money, "which is not surprising given the volatility in the economy over the past two years".

By Mark Hornby