Australians are gearing up to take on more debt, despite one in two households indicating that another rate hike would negatively impact their finances.
According to the latest Dun & Bradstreet Consumer Credit Expectations Survey, 20 per cent of households expect their debt levels to increase in the coming months, 23 per cent expect to apply for new credit and 13 per cent intend to make an application for a limit increase on a current account.
Meanwhile, 49 per cent of households are indicating that an increase in interest rates would negatively impact household finances.
The survey found that certain demographics (18-49 years and those families with children) are more likely to experience financial stress, with these two groups having significantly higher proportions of people anticipating a need to use credit to pay for otherwise unaffordable expenses and indicating that another interest rate rise would negatively impact their household finances.
The report also found that this demographic also intends to make major purchases in the months ahead and they are more likely than others to fund their purchase using an interest free deal.
Dun & Bradstreet’s chief executive officer Christine Christian said the apparent lack of concern about the consequences of unmanageable debt levels is worrying.
“Australia lived up to its reputation as the lucky country during recent global economic events however, our resilience as a nation and our relative lack of pain compared to other developed nations may have resulted in a failure to learn some important lessons,” Ms Christian said.
“Dun & Bradstreet’s latest research shows that consumers are concerned about the impact of rising interest rates on their finances. However, significant portions of Australians intend to take on more debt in the coming months and many are expecting a need to pay expenses on their credit card.”