A new survey of 2,000 Australian consumers conducted by independent market analyst Datamonitor show that almost a quarter of credit card customers admit to sometimes buying items they can’t afford with their card. In addition, most consumers use their credit prudently, nine percent of card customers admit to only managing the minimum payment each month. This figure corresponds to one million Australians – these are the customers that are more likely to have problems managing their credit card debt.

Petter Ingemarsson, who is the Financial Services Analyst at Datamonitor, comments “Most Australians are financially savvy, but a minority are tempted by the easy availability of credit.”

Although most Australians use their credit cards prudently and responsibly, almost a quarter of respondents in the survey admit to sometimes using their card to purchase items they can’t afford. As consumer credit has become easily available, and as credit card limits have risen over the last few years, some are concerned that consumers are being tempted to overspend, with January often the month when customers face the results of this on their bills following Christmas shopping sprees. When asked how respondents felt about their credit limit, eight percent of Australian credit card customers in the survey thought their credit limit was too high because it tempts them to overspend. Australian credit card providers thus need to be careful selecting whom to offer credit to, and be transparent in communicating associated costs.

When asked for the most appealing factors when choosing a new card, over 86% of Australian credit card customers questioned in the survey mentioned lower fees. Only 47% mentioned an attractive reward program as a factor when choosing a new card, while 54% mentioned attractive interest rates. Over the last few years, Australian credit card reward programs have become less generous, and as a result, customers have become more mindful of credit card fees. In the survey, 43% of credit card customers feel that their reward program fails to make up for the annual fee on their card. In contrast, only 20% feel that their reward program does make up for the annual credit card fee. Low fee cards are thus expected to continue to play an important role in the Australian card market.

Further Reading: Payment Cards in Australia 2007