Australians are Saving Not Spending

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Money saving website, Money Choices, is keeping its finger on the pulse of the current economic conditions in Australia especially as it relates to savings habits.

Sydney, NSW, August 24, 2010 (PressReleasePoint) -- Money saving website, Money Choices, is keeping its finger on the pulse of the current economic conditions in Australia especially as it relates to savings habits. In general market data indicates that Australian individuals and families are more likely to save money than spend meanwhile there is an expected rise in credit cards for people with higher income.

The Reserve Bank of Australia have kept interest rates unchanged at 4.50% since May 2010 which has helped to ease the concerns of homeowners. This also means that the average interest rate on bank saving accounts are unlikely to go up but will stay as they are currently. According to Money Choices website in August 2010 the average interest rate of online savings accounts is around 5.19% and the average introductory rate of those high interest savings accounts is hovering at 6.29%.

Recent data from credit reporting agency Veda Advantage shows Australians are more likely to save than spend. According to Veda Advantage, this was the 11th consecutive quarterly year-on-year decline in personal loan applications and the 8th consecutive quarter year-on-year decline for credit cards. This may be attributed to marginal 2.5% rise in disposable income for Gen Y’s barely keeping pace with the rise of inflation and the fact that according to the 24,000 consumers surveyed by the Commonwealth Bank back in March only 10% of respondents were thriving financially.

The raft of debt studies and credit reports that have come out over the last quarter have shown that people just are expecting to spend. The March 2010 Australian Debt Study, conducted by Galaxy Research, revealed only 8% of Australians were looking to apply for new credit in the six months through to September 2010.

However, despite the growing trend to save rather than spend, the latest research from credit reporting agency Dun & Bradstreet revealed that 23 percent of Australian households expect to apply for new credit in the next three months.

Veda Advantage's quarterly Consumer Credit Demand Index for April-June 2010 reported:
- Credit card applications remained flat (-0.2%) compared to the previous June 2009 quarter.
- Applications decreased by 9 percent compared to the previous quarter.
- Credit card enquiries fell for the 8th consecutive quarter year-on-year.

Chris Gration, Veda Advantage’s Head of External Relations, attributed this continuing trend to a "saving rather than spending" mentality and ever looming rising interest rates. In the report Gration states that the saving habits Australian consumers adopted during the 2009 downturn seem to be continuing well into 2010.

Started in July 2008, Money Choices is available on the World Wide Web at http://www.moneychoices.com.au. The Money Choices web site compares a wide range of online savings accounts, high interest savers, credit cards and loans on offer from banks and lenders. The website also features independent reviews of products along with the personal finance blog called the "Money Hacker" where visitors are invite to read and comment on money saving tips, news and blog posts.
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