Rates rises worry households

HALF of Australian households are worried interest rates will rise but only one in five expect their debt levels to increase in coming months.

Dun & Bradstreet's latest survey of the consumer credit expectations of 1,205 adults across Australia found 49 per cent anticipated a further rise in interest rates would put a dent in their household finances.

The credit reporting agency completed the survey in June, one month after the Reserve Bank of Australia (RBA) lifted the official cash rate to 4.5 per cent, its sixth rise in eight months.

Households with dependent children will face more stress, with 55 per cent of respondents with children saying another rate rise would have a negative impact on their finances, compared with 43 per cent of households without children.

However, more financial stress would translate into more debt for just 20 per cent of households, Dun & Bradstreet said in a statement on Wednesday.

Expectations of spending in the September quarter show almost half of respondents aged under 50 intended to use credit to pay for planned expenses over this period.

One quarter of Australians aged over 50 years planned to do the same, Dun & Bradstreet said.

The RBA's credit and charge card statistics for May 2010 showed the average credit card balance reached $3,248 in May, an increase of five per cent in 12 months.

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