AUSTRALIANS appear to have entered a new era of financial conservatism, with credit card balances falling for the first time since records began 14 years ago, central bank figures show.

The Reserve Bank of Australia (RBA) data also revealed that consumers collectively spent $17.376 billion, or 7.5 per cent less, on their credit cards in April than in the previous month.

April’s fall followed a 9.6 per cent rise in spending on credit cards during March.

Commsec economist Savanth Sebastian said Australians were reluctant to use their credit cards because of worries about the economy.

The average balance on a credit card declined by an annual 1.2 per cent to $3,080 in April – the first fall since records were kept more than 14 years ago, Mr Sebastian said.

“Despite early signs that the global economy is stabilising, consumers continue to remain cautious, shunning debt at every opportunity,” Mr Sebastian said.

“Credit card lending is actually contracting in annual terms marking the weakest reading in since records were maintained 14 years ago.”

Mr Sebastian said increasing fears about holding a job would keep consumers frugal with their credit cards. The Federal Government has forecast the unemployment rate to rise from a current 5.7 per cent to peak at 8.5 per cent in late 2010.

“The expected rise in unemployment will ensure that consumers largely focus on necessities rather than splurge on luxuries,” he said.

Credit repayments fell by 7.9 per cent to $18.168 billion in April after increasing by 17.5 per cent the month before. Higher interest rates charged on cash advances led to consumers reducing the use of the facility, Mr Sebastian said.

Consumers were shunning cash advances on credit cards, with the number of advances falling by 10.9 per cent to 2.377 million in April, a 11-year low.

The value of cash advances dropped to its lowest amount since October 2004.

“Cash advances are falling at a nearly 17 per cent annual rate, matching the weakest reading since records were kept over 14 years ago,” Mr Sebastian said.

A senior analyst with financial researcher Canstar Cannex, Harry Senlitonga, said the RBA data showed Australians were switching from credit cards to debit cards to make their payments.

“The amount transacted on debit cards in the last 12 months is up 31.86 per cent,” Mr Senlitonga said.

He said the value of transactions by electronic funds transfer point of sale facilities (EFTPOS) rose by 11.77 per cent in the year to April.