Two thirds of Australians are planning to spend less on gifts, sale shopping and family entertainment this Christmas, according to a new survey by finance comparison website Mozo.com.au.
Mozo surveyed 500 Australians over the last two weeks and found that 43 percent are planning to spend ‘significantly less’ this festive season, while a further 24 per centwill spend a little less than they had originally planned.
Home borrowers in particular are feeling the crunch of rising interest rates. A whopping 60 percent of Australians with a mortgage say they will significantly cut back their Christmas spending as a result of the recent rate rise, while a further 27 percent will cut back a little.
Australians planning a more frugal festive season are most likely to cut spending on Christmas gifts, with six in ten Aussies planning to play scrooge on presents for family and friends. Cutting spending at the end of year sales was next on the list, followed by family entertainment and holidays over the summer break.
More than a third of home borrowers (37 percent) surveyed have said they are more likely to use their credit cards to cover Christmas expenses than they were before the rate rise, which is a dangerous practice given that credit card interest rates have been quietly rising alongside home loan rates.
Rohan Gamble, Dynamic Business blogger and Managing Director of Mozo, said, “No one likes cutting back on Christmas festivities such as gifts, holidays and family entertainment, but the last thing that financially stretched borrowers need is an expensive New Year credit card debt hangover.
“Borrowers who are already feeling the pinch of rising home loan rates should be very careful about relying on credit cards to cover Christmas costs, as the average credit card interest rate is now more than double the average mortgage rate.”