Many consumers plan to ditch credit in favour of using savings to pay for major purchases this Christmas.
Almost two-thirds will use cash from savings to pay for additional expenses during the December quarter, according to Dun & Bradstreet.
The credit agency's latest quarterly online survey of credit expectations showedsubdued festive spending is ahead with more than half of the 1212 consumers surveyed having no plans to make major purchases during the next three months.
Of those who do, 82 per cent said they would use savings instead of credit.
"Ordinarily, we would expect borrowing to rise more dramatically around Christmas time, but these results would indicate otherwise," chief executive Christine Christian said.
Only 20 per cent of consumers plan to apply for new credit in the December quarter, down from a third in mid-2009.
However, financial stress among low-income households and younger consumers is rising as they continue to access more credit, suggesting credit providers may face a higher number of defaults, Ms Christian says.
Forty per cent of low-income households expect difficulty meeting credit repayments over Christmas, D&B found. The findings come a week after figures from Australia's biggest privately owned debt collection company show a surge in the number of people repaying overdue debts in instalments.
