Long run of interest rate cuts are coming to an end

It looks like our long run of interest rate cuts may be coming to an end.

For the first time many economists believe that the next move by the Reserve Bank will be a rate hike, and that could mean trouble for the growing number of Aussies who already default on their credit cards.

The Christmas season is upon us and the credit card is on the loose.

Also read: Years of structural shift ahead for the Aussie economy

Spending on credit has got the Reserve Bank watching closely, with household debt at record highs.

“Debt levels relative to income are high in Australia, and are much higher than they used to be,” Reserve Bank governor Philip Lowe said.

This is a worry, he says, if the economy turns nasty.

But his positive comments on Australia’s economic growth has the experts tipping that any more mortgage rate cuts are unlikely.

Market experts even think there is a small chance that rates could be hiked before the end of 2017.

Despite record low mortgage rates, for many the focus has not been paying off credit card debt.

Nearly one in three Australians has defaulted on credit card payments and around 46% of these are repeat offenders, with men more likely than women to miss a payment.

Also read: Economic outlook uncertain

With talk to mortgage rates set to rise, its feared consumers used to low interest rate payments will be caught out.

“The manageability of paying a high interest rate on your mortgage as well as a high interest rate on your credit cards will send a lot of people over the edge,” Financial Rights Legal Centre xx Alexandra Kelly said.