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Australian families 'paying the bills with credit cards'

Date Published : Friday, July 11, 2008

The tightening economy is forcing many Australian families to use credit cards in order to make ends meet, a new report has found.

According to the Consumer Credit Survey by Dun & Bradstreet (D&B), 30 per cent of households with children say they expect to use a credit card during the next three months to buy goods and services that they would not otherwise be able to afford, news.com.au states.

A further 23 per cent of Australians without children believe they will use a credit card to purchase essentials in the next quarter of the year.

D&B corporate affairs director Damian Karmelich said this reflects how circumstances have shifted from the situation seen 12 to 18 months ago, when Australian consumers would only be likely to use a credit card to buy luxury items.

He added that high interest rates, the increasing cost of fuel and inflated food prices had all stretched family budgets to the point where they now need credit to pay for essentials.

In addition to those who expect to use credit cards to pay for items, some 18 per cent of households with children say they will probably apply for some form of credit over the next quarter, compared to a national average of 15 per cent.

However, using credit can increase family debt - and one third of households said they think their household debt will be higher in three months' time.

This is six per cent higher than the quarter ending in June and 14 per cent more than when the survey began in October 2007.

D&B chief executive Christine Christian said the figures highlight the need for Australians to be "careful" with their finances during periods of economic instability.

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