The Reserve Bank of Australia has conducted a recent study that indicates that Australia is still a cash based society. However it is not to be overlooked that the use of credit cards continues to rise.
The RBA study of consumer payment behaviour found that cash accounts for 70% of all transactions. EFTPOS, MasterCard, and Visa Debit Card payments make up 15% of all transactions followed by MasterCard and Visa Credit Card transactions at 9%. Only holding 1% of total transactions is American Express and Diners Club cards.
Cash is mostly used for smaller transactions such as food bills. For higher value consumer payments, BPAY and cheques make up 29% of transactions above $500. Debit and credit cards account for 45% of larger transactions.
The study also found that participation in loyalty or reward programs and the availability of interest-free periods tended to increase the appeal and use of credit cards.
Tip for Avoiding Credit Card Debt
As attractive as using a credit card may be for higher value purchases, you have to consider the amount of interest being charged on credit card debt. Credit card debt can attract nearly 20% interest which can have a significant impact on the household budget. One way to get around this is to prepare for surprise expenses ahead of time – open a high interest savings account with a leading provider and move any left over funds into it each month to cover future surprises – for example, if the fridge or washing machine breaks down.
As many of us know, by making those larger payments on your credit card, you are bound to pay more in the end due to high interest rates, charges and fees. Australian Lending Centre has many options available for people struggling with credit card debt. To speak with one of our debt consultants today, please call 1300 138 188 or simply fill out an enquiry form to your right.