Household savings have dramatically changed for the better in the June quarter, however, credit cards became the major cause of debt in Australia, according to a recent survey.

Figures released by the Melbourne Institute showed that the country's household financial condition index peaked at 17.2 per cent to 33.7 in June, up from 28.8 in March.

“Credit card debt overtook mortgage debt as the main form of household debt in June, 36.6 per cent compared to 33.9 per cent,” Dr. Edda Claus of Melbourne Institute said in a stament on Thursday.

“This is the first time since November 2006 that household nominate credit card, and not mortgage debts, as their main form of debt.”

Majority of the survey's respondents attributed the “rainy days” as their prime motivation for saving, with 51.5 per cent. It remained unchanged since March of this year, the survey says.

Respondents also nomitated holidays or travel as the motivation for saving also peaked from 55.0 per cent in March to 55.8 per cent in June.

Credit card debt also became the main form of debt for households, instead of mortgage debt, with 3 per cent to 36.6 per cent.

“About 48.8 per cent of Australian households saved part of their income in June 2010, up from 46.2 per cent in March,” the report revealed.

The survey also showed that three quarters of Australian households have owned their homes through a mortgage, sliding down from 79.8 per cent in March to 78.8 per cent last year.

Only 30.5 per cent of households have put up new savings into deposit-taking institutions while bank deposits remained strong for savings.

At least 40 per cent of households admitted they were debt-free, while one-third of respondents claimed they have mortgage debt.

Queensland is expected to have higher debt than in other States, while New South Wales and Victorian households will likely save their money.