Finder’s RBA Survey: Experts predict an uptick in credit card reliance this Christmas as cash rate holds

Aussies will have to wait until next year for mortgage relief as the RBA held the cash rate at its final meeting of 2024.

In this month's Finder RBA Cash Rate Survey™, 40 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.

All experts (100%, 40/40) correctly predicted a cash rate hold – keeping it at 4.35% in December.

Graham Cooke, head of consumer research at Finder, said many can't wait for a rate cut.

"Thousands of stressed homeowners can't manage much longer with soaring mortgage costs smashing household budgets.

"While we expect the RBA to start cutting the cash rate next year, many will struggle through the festive season with less money to spend than in previous years."

Aussies with the average home loan size of $641,416 are now forking out $3,958 per month on repayments on average.

That's $1,453 more per month – $17,436 more per year – than they were paying before the RBA started lifting the cash rate in May 2022.

Credit card dependence predicted to rise this Christmas

The majority of experts who weighed in* (54%, 13/24) expect Aussies to be more reliant on credit cards this Christmas compared to last year.

This comes as 29% of credit card holders say they couldn't manage their finances without one, according to Finder's Consumer Sentiment Tracker.

Finder's data shows the average Aussie credit card holder was carrying $3,189 in credit card debt in November.

Cooke urged Australians to be cautious of spending on credit over the festive season.

"Credit cards can be a great financial tool to earn points, protect your purchases and build your credit, but they can quickly become a nightmare if you fall behind on your repayments.

"Embracing the silly season shouldn't mean getting in over your head – you don't want to go into the New Year with a Christmas debt hangover," Cooke said.

How Donald Trump's presidency will impact Australia's economy

Fewer than 1 in 5 experts (17%, 5/30) believe Donald Trump's second presidency will have a positive effect on the Australian economy.

2 in 5 (40% 12/30) think a second Trump term will negatively affect the Australian economy, while 20% (6/30) say they don't know at this stage.

Almost 1 in 4 (23%, 7/30) think Trump's effect will be neutral.

Shane Oliver from AMP said a Trump presidency likely meant more trading uncertainty.

"With his policies on tariffs, tax cuts and the DOGE (department of government efficiency) it means greater trade uncertainty with a high risk of a global trade war, more pressure to cut taxes and pressure to reverse the trend towards bigger government," Oliver said.

David Robertson from Bendigo Bank said the impact for Australia would likely be via trade.

"Trump's policy platform and likely leadership style will likely add further volatility to financial markets and global geopolitical tensions, but the impact on Australia may be more-so via our largest trading partners than directly," Robertson said.

Stella Huangfu from the University of Sydney said if Trump reignites trade wars with China, it could disrupt global trade, reducing demand for Australian exports like iron ore and coal and hurting the economy.

"However, rising U.S.-China tensions could prompt China to find alternative suppliers, increasing Australia's commodity exports," Huangfu said.

Dale Gillham from Wealth Within said it was too early to tell.

"We can speculate all we like, but in the end nobody can be sure what effect this next presidency will have on world economies.

"The talk before his last one was very negative and what was predicted did not occur. So I am slightly positive," Gillham said.

*Experts are not required to answer every question in the survey

Here's what our experts had to say:

Stella Huangfu, University of Sydney (Hold): "Australia's Q3 GDP growth was just 0.3 percent, with annual growth at 0.8 percent, the lowest since 2020. Weak household consumption points to limited economic momentum. This suggests the RBA will likely hold rates for now, with potential cuts by May 2025 if growth remains sluggish and inflation eases."

Tomasz Wozniak, University of Melbourne (Hold): "Happy summertime, Everybody! ... and expect no changes in the cash rate level for now. One should add "unsurprisingly" because all the statistical data releases and RBA's communication indicate an extension of the wait for the first cut. My forecasts from statistical modelling confirm this. The next board meeting in February will be held after some political changes worldwide, and for now, it is impossible to tell if the monetary policy stance will be affected. So, we keep waiting. You can access these forecasts at https://forecasting-cash-rate.github.io/."

Anthony Waldron, Mortgage Choice (Hold): "At its final monetary policy decision of 2024, I expect the Reserve Bank will keep the cash rate on hold. Although headline inflation has been falling, Governor Bullock recently stressed that inflation would have to be sustained within the Board's target range of 2-3% before the RBA will consider lowering the cash rate."

Shane Oliver, AMP (Hold): "With underlying or trimmed mean inflation at 3.5%yoy the RBA is in no hurry to cut rates so we pushed out our expected first rate cut to May. However, with inflation trending down and weaker than expected growth we think the RBA should cut earlier and there is still a high chance of a February cut."

Evgenia Dechter, UNSW (Hold): "Over the past few quarters, we have observed stable unemployment, low GDP growth with high government spending but weak private consumption and investment, and declining inflation, though core measures remain above target. This creates a complex mix for the RBA. However, given stable unemployment and inflation still above the target, a cash rate cut this year is highly unlikely."

Kyle Rodda, Capital.com (Hold): "The RBA requires more incoming data on the inflation outlook before potentially shifting its guidance in a more dovish direction."

Dr Andrew Wilson, My Housing Market (Hold): "Latest Inflation still well above target range".

Nalini Prasad, UNSW Sydney (Hold): "Inflation is moving in line broadly as forecast by the RBA. Given this I don't think the RBA will move rates."

Stephen Halmarick, Commonwealth Bank (Hold): *Weak economic growth and decelerating inflation."

Matthew Greenwood-Nimmo, University of Melbourne (Hold): "I think that the RBA will hold the cash rate steady until it perceives underlying inflation to be sustainably within its target range."

Mala Raghavan, University of Tasmania (Hold): "The September quarter inflation rate is recorded at 2.8%, with the October monthly CPI rising to approximately 2.1%. Though both figures align within the RBA's target range, the RBA is likely committed to maintaining its cash rate by choosing a wait-and-see approach. This decision makes sense given the persistent inflationary pressures in the services sector, housing (including rents and new dwellings), food, and non-alcoholic beverages. As we approach the festive season, maintaining the current monetary policy could prevent unintended demand-driven inflation. Additionally, this cautious stance allows the RBA to monitor global economic developments and understand how external factors may influence the Australian economy moving forward."

Nicholas Gruen, Lateral Economics (Hold): "They seem reluctant to cut, but with further bad data may cut in Feb".

Leanne Pilkington, Laing+Simmons (Hold): "The impacts of the rate rise cycle are now being more tangibly felt, and this creates the opportunity for the Reserve Bank to cut rates in 2025 and bring some cost of living relief to mortgage holders."

Dale Gillham, Wealth Within (Hold): "Whilst the RBA is under increasing pressure to drop rates, they seem to be taking a very conservative approach and this is delaying any rate cut."

Garry Barrett, University of Sydney (Hold): "At peak, into 2025 before reducing cash rate with continued decline in inflation".

Sean Langcake, Oxford Economics Australia (Hold): "Unit labour cost growth and underlying inflation are still too high for the RBA to ease conditions. We think the Bank will need to see progress in the next two CPI prints before cutting rates."

Nicholas Frappell, ABC Refinery (Hold): "The RBA may want to get past seasonal data and review."

Adelaide Timbrell, ANZ (Hold): "With the economy –notably jobs growth and business conditions –continuing to show resilience, we are also shifting our view on the quantum of rate cuts and now expect only two, in May and August 2025. That leaves the terminal cash rate at 3.85%."

Geoffrey Kingston, Macquarie University Business School (Hold): "May still looks like the most likely month of the first rate cut. But that could be put back to July or later in the absence of decent falls in trimmed-mean quarterly inflation. Or it just might be brought forward if the Treasurer appoints inflation doves to the new policy board."

Mathew Tiller, LJ Hooker Group (Hold): "The RBA will hold steady until they are confident inflation is under control. While headline inflation has fallen into the 2–3% target range, thanks to energy rebates and other factors, underlying inflation remains above the band. Combined with steady employment markets and the uncertain impact of the new US President's trade policies, the RBA is likely to remain cautious before cutting rates."

Cameron Kusher, REA Group (Hold): "While headline inflation is back in the target range, the RBA has made it clear that they are focusing on underlying inflation which remains too high. They also believe it will still take quite a while for inflation to remain sustainably within the target range which suggests that rate cuts are still some way off."

Mark Crosby, Monash University (Hold): "Further weakness in the economy is likely to see demand pressures slowly receding, allowing the RBA to cut rates around mid 2025".

James Morley, The University of Sydney (Hold): "The labour market remains robust in Australia and the RBA is clearly worried about underlying inflation remaining outside the target range. The economic effects of policies from the Trump administration are uncertain, but a heightened risk of higher global inflation will also make the RBA more cautious about cutting rates until a range of inflation measures are solidly and persistently in the target range. I don't see the RBA bringing rates down towards a more neutral level, which is itself uncertain, until the second half of 2025. Of course, this could change if there is a large shock to the global economy in the meantime."

Stephen Koukoulas, Market Economics (Hold): "Low inflation, weak growth".

Tim Reardon, HIA (Hold): "While households are struggling, migration and government spending are driving economic activity. A second cycle of price increases are likely to emerge, supported with ongoing rental price increases and excise."

Tim Nelson, Griffith University (Hold): "Awaiting further economic data."

Jeffrey Sheen, Macquarie University (Hold): "The RBA appears concerned about its reputation for keeping control of inflation. It has a finely-tuned focus on the trimmed mean measure, which remains just above the target inflation range. Meanwhile the headline inflation rate is doing just fine, and the downward trends in all inflation measures seem robust enough. My preference would be for the RBA to have already begun to cut the cash rate towards the lower neutral rate. By early 2025, such moves are likely to be more obviously needed, not least because of the Trump re-ascendancy."

Peter Boehm, Pathfinder Consulting (Hold): "The key metric the RBA monitors is headline inflation - which rose to 3.5% (from 3.2%) in October, and is outside the RBA's target range. This is bad news not only for mortgage holders but for the broader economy as prices continue to rise. Cost of living remains a big issue for most Australian families. As reported by the ABC on 17 Nov 24, there are around 3,000,000 Australians at risk of homelessness due to increasing rental stress and low incomes - yet more evidence the sustained and ongoing increases in cost of living is negatively impacting most families and is having devastating impacts on a large proportion of Australian households. Sadly, I cannot see one of the main causes of this, inflation, improving in the near term and do not expect any movement on interest rates until the middle of 2025."

Adj Prof Noel Whittaker, QUT (Hold): "Despite inflation being down a bit because of reduced electricity prices due to government subsidies the Reserve Bank has made it clear they will not be seduced into dropping rates on such a flimsy premise. I see no chance of rates dropping for at least nine months. If you think inflation is on the way down just travel around the country and look at all the construction going on. Plus, there is massive spending power available. Last month household deposits reached a new high of $1.4 trillion".

David Robertson, Bendigo Bank (Hold): "The RBA are clearly on hold as underlying inflation remains at 3 1/2 % but are slowly moving to a 2025 easing cycle most likely to commence in May. Two quarters of improved core inflation should allow for a decent cut on May 20- hopefully 35 basis points to 4%".

Associate Professor Mark Melatos, School of Economics, University of Sydney (Hold): "Monthly inflation readings since last quarterly CPI announcement have fallen precipitously. Assuming these monthly reductions are reflected in the next quarterly CPI report, then quarterly headline CPI inflation may well show a return to the RBA's target 2-3% range. However, underlying inflation is still above the target range and rising at last report. Any temptation to reduce the cash rate will be tempered by continued upward pressure on house prices and full employment. The RBA will likely only move to cut rates once convinced that underlying inflation has settled in the 2-3% range."

Brodie Haupt, WLTH (Hold): "Hold - However, after the recent inflation figures confirmed our core inflation remains outside of the target range, my fear is that a rise in early next year looks more likely than a cut. 180 day bond rates suggest a rise before a cut as well, which leaves the affordability crisis and the Australian people's holiday budgets on tender hooks."

Saul Eslake, Corinna Economic Advisory Pty Ltd (Hold): "I'm still holding out for an initial cut in February, although my confidence in that view has been diminished by the RBA Board's statement that it will require "more than one good quarterly inflation number" to give it the confidence required that inflation is "sustainably" heading back to the target range in order to take that first step, and by the unexpected uptick in the 'underlying' inflation rate over the year to October."

Craig Emerson, Emerson Economics Pty Ltd (Hold): "The RBA is displaying great conservatism in its monetary policy settings, its public statements suggesting it will need to be highly confident that inflation will not rise again before it considers any cash rate reduction".

Cameron Murray, Fresh Economic Thinking (Hold): "Australia's economy is still humming along. Inflation is back to target, but not clear that this will automatically lead to lower interest rates."

Matt Turner, GSC Finance Solutions (Hold): "Based on the latest CPI data it is clear that we are still some way from being back to a comfortable level of inflation for the RBA. There are still many macroeconomic headwinds at play as well with the ongoing unrest in the Middle East and Ukraine along with the new tariffs to be introduced in the US. These have potential to be inflationary so the RBA will have no choice but to tread carefully."

Michael Yardney, Metropole Property Strategists Pty Ltd (Hold): "The latest inflation data continues to support no change to official rates in December, but gives more ammunition for the RBA to be cutting rates by May with the worst of the cost-of-living shock behind us. While headline inflation has decreased to 2.1%, well within the RBA's target range, core inflation remains elevated at 3.5%, exceeding the desired 2–3% band. The RBA will require more than one favourable quarterly CPI result to initiate rate reductions, making a cut before May 2025 unlikely. Additionally, Australia's strong labor market, with persistent low unemployment rates must worry the RBA as this contributes to wage growth and consumer spending, which can sustain inflationary pressures."

Jakob Madsen, UWA (Hold): "The cash rate has normalized to the level it should be and inflation is relatively steady".

Stephen Miller, GSFM (Hold): "Inflation is a little too "sticky" to allow a policy rate cut given labour market conditions are holding up well."

Richard Holden, Unsw (Hold): "Core inflation is too high and the RBA didn't raise rates enough."