Are Australian’s becoming a nation of credit card spenders? The demand for credit cards is certainly on the rise, as more and more people turn to their trusty plastic cards to book travel, purchase tickets or shop to their hearts content. However is an increase in credit card demand beneficial or detrimental for credit card holders?
The increase in credit card demand is beneficial for credit card holders because of the fact that if the more Australians want lots of different credit cards, the better competition there will be between card providers. And greater competition is occurring between providers as credit card demand grows stronger.
According to Veda's October 2013 credit card consumer report, overall consumer credit demand rose 7.4% over the past year, with credit card enquiries up 13.7% year on year.
What increases credit card demand?
- People are getting savvier about their spending habits and using credit cards with rewards to earn points and receive free items.
- Low interest rate credit cards allow people to purchase big ticketed items instead of applying for a personal loan which could have a higher rate.
- People like to have lots of options when making transactions.
- Credit cards are more trusted with better security technology.
The proof of growing credit card popularity lies in the stats but that doesn’t mean you should jump on the bandwagon. Think about why you want a credit card, if you actually need one, and if so, what you plan to get out of it. If you can pay off your entire debt each month and spend wisely then it could add a little bit more convenience to your life and possibly some rewards too.