Weak consumer credit demand set to continue
Weakness in the consumer finance market is set to continue, with Veda data showing credit card applications grew by only two per cent in the March quarter.According to Veda's latest Consumer Credit Demand Index, growth in credit card applications fell from quarter-on-quarter growth of 7.3 per cent in the December quarter to two per cent in the March quarter - one of the slowest quarterly growth rates reported over the past two years.Veda's data, which is a forward indicator of credit growth, suggests that there is no turnaround in consumer lending in sight.Reserve Bank figures show consumer lending falling 0.1 per cent in February, compared with the previous month, and falling 0.3 per cent over the 12 months to February.And Australia Bureau of Statistics figures show new personal finance commitments fell 1.4 per cent in January, compared with the previous month. New personal finance commitments of A$6.8 billion in January were down 8.1 per cent from commitments a year earlier.According to Veda, demand for personal loans was stronger. Growth in personal loan applications grew 7.6 per cent in the March quarter - down from a growth rate of 11.6 per cent in the December quarter.Last year, growth in credit card applications was driven, to a large extent, by generous zero rate balance transfer and purchase offers. That marketing push appears to have run its course.