Complacency may set in following the RBA rate hold yesterday, causing further rises in already high levels of household debt.
According to financial comparison site RateCity, the nation should be concerned about its current levels of household debt.
"Australia has never seen households take on this amount of debt, where Reserve Bank figures show we have collectively $49 billion of credit card debt. That's almost $2.4 billion more than December 2009," said RateCity's consumer advocate Michelle Hutchison.
Hutchison said the outlook for homeowners this year is "worrying", due to slowly rising property prices, expected rises in interest rates and more debt held by households.
"For instance, the average home loan in 2010 was $285,533, which is almost $20,000 more per household than in 2009," she said.
Hutchison urged borrowers not to take the cash rate for granted when managing their debts, due to lenders breaking away from the RBA cycle, and suggested borrowers should use the current repreive to pay off debt.
"We estimated that households are paying more than $4,000 extra in interest annually than in 2009. This can be easily avoided by reviewing your budget and controlling your spending while making higher repayments towards your debts."
(By: Ben Abbott, 2/03/2011, www.theadvsier.com.au)
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