CHOICE has released its latest Consumer Pulse survey, with 31% of consumers saying they find it difficult to cope with extra spending at Christmas, and 35% not expecting to pay off their credit cards in full after Christmas.The findings come following a series of Senate Committee recommendations around credit cards designed to improve portability of accounts and provide clearer information around interest rates.
“Christmas can be a stressful time for many consumers, so it’s worth making a list and checking it twice before going into a great deal of debt on your credit card,” says CHOICE Head of Media Tom Godfrey.
“With the retailers spruiking 0% credit card offers and other bad opportunities to get yourself in over your head financially, it’s worth setting a budget and sticking to it so you don’t start the New Year in financial distress.
“The good news is we found that 55% of Australian consumers have set a budget this Christmas, so are unlikely to get in over their heads during the Boxing Day sales retail hype.
“While 54% of Australians will cover the cost of Christmas using their current income, 33% will dip into their savings and 17% will use a credit card.
“With so many consumers living off credit to get through the Christmas period and not planning to pay the balance off in full, it’s worth checking the interest rate you are paying.
“The fact is, if you have a credit card with one of the big four banks and you plan on carrying a balance forward you’ll be paying too much interest in the New Year.”
CHOICE’s survey also found the average Australian estimates they’ll spend $689 on Christmas, with gift cards (44%), toys (41%), chocolates or gift baskets (36%) and clothes (34%) topping the list of gifts.
Across cost-of-living concerns more broadly, the December CHOICE Consumer Pulse Survey showed electricity was still the top household pressure at 75% (easing from 79% in September), followed by food and groceries (74%) and health and medical costs, including health insurance (67%).
The most significant drop was in concern over fuel costs, down from 70% in September to 62% in December. This followed a similar drop from 78% in the June quarter.
There was also a surge in optimism about the bigger economic picture, with the proportion of Australians rating the economy as ‘poor’ dropping to 30% (from 37% in September), while 31% rated it as ‘good’ (up from 27% in September).