Improved appetite for credit to benefit business

Small businesses may see an uplift in sales in the coming quarter, with D&B's recent Consumer Credit Expectations Survey indicating consumers are planning to use their credit cards and focus less on saving money.

Shrugging off an enduring mood of financial conservatism, 41 per cent of consumers with a credit card intend to use their card for purchases they couldn't otherwise afford in the months ahead. This is the highest level recorded in three years and suggests that pockets of optimism in the economy are making consumers less cautious about how they spend.

Additionally, consumers are expected to turn away from saving more money. With a five per cent fall from the previous quarter, 26 per cent of consumers now indicate they are more likely to save money compared to the same time last year, while 31 per cent are less likely.

While the economy's performance has been patchy in the post-GFC world, consumers appear more heartened by the absence of any immediate or pervasive negative news, with other consumer sentiment measures showing confidence levels increasing since the latter part of 2012.

"After a long period of financial caution, it appears that consumers are more inclined to take hold of the green shoots in the economy, than focus on any negatives there may be," says Danielle Woods, Dun & Bradstreet's Director of Corporate Affairs.

"With the RBA maintaining low interest rate levels, the unemployment rate relatively steady, house prices recovering, and a bullish share market, consumers are signalling that the positives outweigh the negatives and consequently are willing to spend more freely on credit.

"The combination of an increased intention to use credit cards and a willingness to forego greater savings suggests that consumers are setting aside their caution, which bodes well for businesses. After a long stretch of difficult trading conditions, businesses will be hoping to see a flow-on effect from less cautious consumers," Ms Woods added.

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