Credit card balances 'show Aussies reluctant to take on new obligations'

Credit card balances could be one reason why Australians are more reluctant to take on new financial obligations.

Australians have become more reluctant to take on new financial obligations than they might have been in previous years.

This is according to the Reserve Bank of Australia (RBA) governor Glenn Stevens, who pointed towards credit card balances as one possible reason, the Sydney Morning Herald reports.

He noted that they had decreased from mid-2006 but started to go up in August 2009.

However, Aussie credit balances are still down from the double-digit rates seen in the 1990s and 2000s.

Michael Baker, writing for the publication, said if people are not as keen to take on debt - with credit cards for instance - there will be more of a reliance on disposable income growth and less borrowing occurring.

Mr Stevens announced earlier this month that the RBA was maintaining the interest rate at 4.5 per cent and added that investors had displayed a "good deal more caution" compared to the previous rise at the beginning of May.

By Mark Hornby