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Despite the RBA’s decision to keep interest rates on hold for another month, Australians are still cautious about taking on extra debt, new research has revealed.
According to Veda Advantage’s bi-annual Australian Debt Study, one in five Australians are finding it difficult to repay debt. This is an increase from 19 per cent six months ago.
Of the Australians currently struggling to repay their bills, 28 per cent are likely to apply for more credit in the next six months.
Veda Advantage head of external relations Chris Gration said while some Australians remained cautious, the nation’s debt situation is relatively stable overall.
“The debt study shows most Australians are acting financially responsibly. The anxiety around future ability to repay bills remains high at 77 per cent, however this has reduced significantly from 82 per cent 12 months ago. Two-thirds of people also intend to pay down their credit cards in the next six months and only 2 per cent intend to increase their credit card limit,” he said.
“Despite this sober approach, almost three in every ten Australians who are looking to take on more debt are already in a position of financial hardship and this is concerning.
"The introduction of positive credit reporting is vital to help those living on the financial fringe avoid a situation where cannot repay their debts. The Government needs to act quickly to prevent more Australians falling into a debt spiral.”
Debt refers to the amount of money borrowed from a creditor with the intention to pay back at a specified date.