Credit card debt increases

According to a recent study by CVC Global Consulting, the amount of outstanding credit card balances is outstripping the amount of card expenditure. The growth rate in average balances in the year to July 2000 hit 26.9 per cent, compared to 20.7 per cent in 1998 and 24.9 per cent in 1999. For the same period, the level of credit card spending grew from 31.6 per cent in 1998 to 33.1 per cent for 2000. CVC Consulting says the figures indicate that consumers initially use credit cards for transaction purposes before eventually using them as short-term credit. Mr John Verco, head of Mastercard Australia, claims that they are not worried about the increased credit debt of its customers, as card spending is monitored and taken into account when the bank works out a credit limit