Australian households are falling back on credit cards and personal loans as their savings buffers begin to run down.

Equifax reports in its latest Consumer Credit Demand Index that credit card applications rose 31.5 per cent and personal loan applications rose 22 per cent in the September quarter, compared with the same period last year.

Buy now pay later applications rose 9.9 per cent year-on-year but there was a significant drop in the growth rate quarter-on-quarter. BNPL applications were up 42 per cent in the June quarter.

Demand for secured credit fell during the quarter, with auto loan applications down 3.8 per cent and mortgage applications down 6.1 per cent compared with the same period last year.

Equifax general manager advisory and solutions Kevin James said another factor contributing to increased demand for unsecured credit is the recovery in international travel.

“Many consumers use credit cards to earn points on overseas sending. As travel continues to increase, we may see further growth in credit card demand,” James said.