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Date Published : Tuesday, June 03, 2008
A third of consumers across Australia make purchases of more than $3,000 on a credit card, despite more than half of the nation knowing that a personal loan may be a cheaper option, a new survey has revealed.
Of 1,000 people quizzed by Citibank, 38 per cent chose money stored away in personal savings accounts to fund such a purchase.
Despite much lower interest rates currently being offered on personal bank loans, only ten per cent opted for this compared with 33 per cent using their credit card.
Meanwhile, in Queensland, only seven per cent opted for a personal loan over their credit card - the lowest figure in the whole country.
Jacqueline Nissen, head of consumer lending at Citibank, said that the data showed that people are looking at the rate of interest and the ease of application of credit rather than thinking their purchases through fully.
"More and more customers are choosing to take out a personal loan because of the savings they can make but people still rely on their credit card because it's quick and convenient," Mrs Nissen said.
When asked the most important factors for taking out a personal loan, interest rates ranked as the most popular reason - followed by the ease of application, speed of decision and cash. The brand of the lender was ranked as the least important factor when selecting a personal loan.
Recently, Citibank found that 81 per cent of Australians do now know what rate of interest they currently receive on their savings accounts.
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