Animal spirits low in borrowing and credit

Australian consumers and businesses are reluctant to take out loans, while punters are being savvy with their credit card use despite record transactions.

Consumers and businesses are shying away from borrowing and, while punters are giving their credit cards a workout, they're keeping debt in check.

The total value of new loans including personal, business, housing and lease fell 33.2 per cent in August, seasonally adjusted, after a rise of 60.8 per cent in July.

CommSec chief economist Craig James said only home loans are showing any real growth.

The value of owner-occupied home loans rose 6.1 per cent in August, while personal loans dipped 2.5 per cent and commercial loans were down 4.4 per cent, according to figures released by the Australian Bureau of Statistics on Monday.

"Consumers and businesses are still reluctant to borrow despite interest rates at generational lows," Mr James said.

"The Reserve Bank has even more reason to stay on the interest rate sidelines."

The tameness of `animal spirits' is also clearly evident with credit card lending data released on Monday, which showed while Australians are active in using their credit and debit cards, they're keeping debt at a minimum.

The average balance is two per cent lower than a year ago, while the average balance of credit cards accruing interest is at a nine-year low, Mr James said.

"The average credit card balance rose by just $1.20 to $3,130.40 in August," he said.

But on average, each card holder is making a record 20 transactions on credit and debit cards each month, according to RBA figures.

Mr James said punters continue to be savvy with their use of plastic and are living well within their means.