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Survey Reveals Small and Medium-Sized Businesses’ Attitudes Towards Credit Card Usage

A recent survey conducted by Small Business Loans Australia has provided insights into the credit card usage patterns of small and medium-sized businesses. The survey found that while 23 per cent of businesses planned to reduce the number of credit cards they owned, 39 per cent intended to increase their usage.

This variation in attitudes towards credit card usage reflects the different strategies employed by businesses to cope with financial pressures. According to Alon Rajic, the CEO of Small Business Loans Australia, relying on credit cards to alleviate immediate financial difficulties or as a buffer can be costly in the long run. Credit cards typically carry higher interest rates compared to other forms of finance, such as loans. As a result, businesses end up spending more in the long term.

With the average interest rate on credit cards being around 20 per cent, businesses are increasingly exploring alternative payment methods to manage their expenses. The survey revealed that two-thirds of SMEs are considering options such as direct bank payments or EFTPOS for better spending tracking. Mr Rajic highlighted the benefits of these alternative methods, such as lower to zero transaction fees, immediate settlement, simplified expense tracking, privacy and security, and no credit risk.

The Shift Towards Direct Payment Methods

Small businesses in Western Australia, Victoria, and New South Wales were found to be more inclined towards adopting direct payment methods like bank transfers and EFTPOS over the next six months. This shift in preference indicates a growing awareness among businesses about the advantages of these payment methods.

Business Conditions and Economic Outlook

The survey findings reflect the challenging business conditions across the country. The most recent NAB business survey result showed a decline of one point in July. Furthermore, Westpac economists predict a continued decline in business confidence in the coming months, with this negative trend being widespread across industries and states.

On a positive note, Westpac economists believe that the Reserve Bank has completed its interest rate tightening cycle. They suggest that inflation continues to ease, and the growth outcomes signal a significant economic slowdown, reducing the need for further rate increases in the near future.

Upcoming Economic Indicators

This week, the release of wage data and the latest jobs figures will provide further insights into the state of the Australian economy. JP Morgan economists forecast a quarterly rise of 0.9 per cent in the wage price index, resulting in an annual growth rate of 3.7 per cent. This would be the strongest pace of growth in the past decade. The jobless rate is also expected to increase by 0.1 per cent to 3.6 per cent, with the addition of 5,000 jobs and a stable participation rate.

In this challenging economic climate, AI legalese decoder can assist businesses in navigating complex legal documents related to finances, such as credit card agreements and loan contracts. By using AI technology, the legalese decoder can simplify and clarify the language used in these documents, making them easier to understand and enabling businesses to make informed decisions regarding their financial strategies.

In conclusion, the survey highlights the diverse attitudes of small and medium-sized businesses towards credit card usage. It emphasizes the need for businesses to consider the long-term costs associated with relying on credit cards and explore alternative payment methods for better financial management. As businesses adapt to the changing economic landscape, tools like AI legalese decoder can provide valuable assistance in comprehending complex legal information and making informed financial decisions.

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