New data reveals changing borrower behaviour

That was driven by a 13.5 per cent jump in credit card applications – the strongest growth since 2006 – while personal loan applications fell 5.2 per cent.

However, Veda’s general manager of consumer risk, Angus Luffman, said one of the reasons demand for new credit cards increased so much was due to churn in the market.

Mr Luffman also pointed to Reserve Bank data for the December 2014 quarter, which showed that while the number of purchases grew by 7 per cent, the average spend per transaction fell by 2.9 per cent and credit card balances grew by 1.6 per cent.

“This indicates an emerging trend in the changing nature of credit card use,” he said.

“Credit cards are increasingly being used as payment tools, with people making repayments on existing purchases instead of using them for new borrowing.”

Meanwhile, mortgage application growth picked up for the first time in a year, with the March quarter growth rate of 5.5 per cent double the December quarter rate of 2.7 per cent.

However, this was still well down on the peak of 14.4 per cent recorded in the December 2013 quarter.

Mortgage activity doesn’t form part of Veda’s credit demand index, although it is regarded as a good lead indicator of future activity in home buyer demand and housing turnover.

“Historically, movements in Veda mortgage demand have tended to lead movements in house prices by around six to nine months,” according to Veda.

“Despite starting out slowly in January, mortgage applications saw an improved rate of growth in the March quarter, suggesting demand in the housing market remains strong.”

[Related: Veda reports 52pc rise in ‘high-risk’ credit applications]