You would think that the “biggest economic crisis” to hit the world since the Great Depression would get Australians to put the credit card away. No way. Australians notched up another record Christmas spending spree. Australians have faced tough times before and our will has never been broken. This crisis has been no different. Spending in the 2008 and 2009 Christmas periods were $37billion and $38.9 billion respectively. Australians also spent a record $6.8 billion in the after Christmas sales in the 2009. I know what your probably thinking. All the press was about how 2009’s Christmas spending was going to be down. Way down! As far as the retailers were concerned spending growth of 5.1% IS disappointing, hence all the negative press. In reality it’s still a huge amount of money in an a negative economic climate and I’m sure the nations credit cards are still feeling the burn from their Christmas workout.
The 08 record Christmas Spending was largely attributed to the stimulus package which was flowing though the economy at the time, and consumer sentiment was quite high as there was the promise of further stimulus payments. Only 5% of the stimulus payments made it into the retail sector with most of it being used to pay down debt, mainly credit card debt. It can be assumed that the stimulus payments are well and truly gone. In 2009 Australians spent 5.1% more than they did with $1000 of stimulus payment in their back pocket. Where did they find the extra money? This years Christmas spending spree was fueled by credit cards.
Australian’s have a natural tendency to borrow as much as they can service. Few Australians don’t owe what their credit card limit is. When working out if a new loan is affordable banks don’t use what is owed on credit cards to service the loan, they use the credit card limit. Why? Because 99% of Australians will max out their credit card. Collectively Australian’s owe $43 billion on their credit cards (sorry I use that figure frequently but it is a great deal of money).
Based on the Christmas sales figures, Australians spent $2,077.00 this Christmas. If it went on the credit card that will add an extra $40 to the family budget every month. Just to service the interest. Next year you’ll still owe $2,000.00. For many though that $40 will be the straw that broke the camels back.
Financial problems are not the end of the world. For many you need to hit trouble before your motivated to do something. Financial problems are a great opportunity for many to turn around their financial future. Christmas 09 will provide this opportunity to many.
Congratulations Australia
You would think that the “biggest economic crisis” to hit the world since the Great Depression would get Australians to put the credit card away. No way. Australians notched up another record Christmas spending spree. Australians have faced tough times before and our will has never been broken. This crisis has been no different. Spending in the 2008 and 2009 Christmas periods were $37billion and $38.9 billion respectively. Australians also spent a record $6.8 billion in the after Christmas sales in the 2009. I know what your probably thinking. All the press was about how 2009’s Christmas spending was going to be down. Way down! As far as the retailers were concerned spending growth of 5.1% IS disappointing, hence all the negative press. In reality it’s still a huge amount of money in an a negative economic climate and I’m sure the nations credit cards are still feeling the burn from their Christmas workout.
The 08 record Christmas Spending was largely attributed to the stimulus package which was flowing though the economy at the time, and consumer sentiment was quite high as there was the promise of further stimulus payments. Only 5% of the stimulus payments made it into the retail sector with most of it being used to pay down debt, mainly credit card debt. It can be assumed that the stimulus payments are well and truly gone. In 2009 Australians spent 5.1% more than they did with $1000 of stimulus payment in their back pocket. Where did they find the extra money? This years Christmas spending spree was fueled by credit cards.
Australian’s have a natural tendency to borrow as much as they can service. Few Australians don’t owe what their credit card limit is. When working out if a new loan is affordable banks don’t use what is owed on credit cards to service the loan, they use the credit card limit. Why? Because 99% of Australians will max out their credit card. Collectively Australian’s owe $43 billion on their credit cards (sorry I use that figure frequently but it is a great deal of money).
Based on the Christmas sales figures, Australians spent $2,077.00 this Christmas. If it went on the credit card that will add an extra $40 to the family budget every month. Just to service the interest. Next year you’ll still owe $2,000.00. For many though that $40 will be the straw that broke the camels back.
Financial problems are not the end of the world. For many you need to hit trouble before your motivated to do something. Financial problems are a great opportunity for many to turn around their financial future. Christmas 09 will provide this opportunity to many.