Australian people are now digging into their savings for consumption spending rather than borrow loan. This has lowered the burden for Australia debt condition. However, there is issue on low savings. Less savings may put households into dilemma especially during emergencies. RateCity chief executive Damian Smith advised people to be alert on their personal debt. Credit cards and mortgage should be settled as soon as possible. He even suggested that debt can be reduced without eroding your savings. Credit card debt can be backed up by balance transfer cards.
This news reveals two side of the reducing national debt. It is good that debt can be reduced, which prevent further borrowing. Further borrowing may put the country into higher interest payment and even debt cycle. It is a wise move to support personal debt with savings. Nonetheless, there are risks of decreasing savings as well. People may lack of cash to meet emergencies incidents and less funds are available for expansion of businesses. Therefore, it is all depends to the situation
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