Families using credit to make ends meet

Struggling families are turning to credit cards to make ends meet, a recent survey reveals.

The Dun & Bradstreet (D&B) Consumer Credit Expectations survey found that 30 per cent of families with children are turning to credit cards to pay for items they otherwise couldn't afford.

D&B corporate affairs director Damian Karmelich said higher interest rates, rising fuel prices and inflation at the check-out meant families were being squeezed financially.

Mr Karmelich said blue-collar households, young people and consumers with families had the worst debt levels.

"Where 12 to 18 months ago families would use credit cards to buy luxury items, they are now using it for items they need," Mr Karmelich said.

While the survey showed one third of Australians expected to have higher household debt levels in another three months, credit demand remained strong - especially in the 18 to 34 age group.

About 29 per of respondents in that age category said they would turn to credit in the September quarter to cover otherwise unaffordable expenses.

The survey also found that 10 per cent of respondents indicated that they would miss a bill payment in the next three months.

Mr Karmelich said he was surprised that the over 50s had posted a big rise in debt expectations.

Some 37 per cent of respondents in that age category anticipated their household debt would be higher by the end of the September quarter.

"This part of the community is usually focused on paying off debt, but they may diverting those funds to daily spending," Mr Karmelich said.

He said there had been a dramatic jump in the number of Australians ordering copies of their own credit report to check their financial situation before making a new credit applications.

The data revealed a 118 per cent jump in the number of consumers checking their credit file between December 2007 and April this year.

The Newspoll telephone survey interviewed 1,200 people.