According to data from Illion – parent company of credit score generator Credit Simple – one in three Kiwis (35%) do not pay off their credit card in full each month.
It is concerning to see the level of credit card debt New Zealanders rack up, particularly when credit cards tend to have high interest rates, Credit Simple spokesperson Hazel Phillips says.
“Gone are the days when cash limited our disposable income spending,” Ms Phillips says.
“Flashing the credit card has made it all too easy to keep swiping away.
“All the little daily purchases add up and can easily push people’s monthly spending over the edge.”
According to the Reserve Bank of New Zealand, Kiwis currently have around $6.8 million of credit card debt.
Gen Y – often referred to as millennials – are the most likely to default on a credit card paymemt, with this generation accounting for 50% of credit card defaults, according to Credit Simple.
Have a look at low-interest rate credit cards, currently on Canstar NZ’s database, based on a spend of $3000 per month and sorted by Star Ratings:
Gen Y are more likely to default on their credit card than baby boomers, according to Credit Simple Photo:iStock.
Baby boomers, on the other hand, account for 16% of credit card defaults.
Just over one in 10 respondents (11%) say they are comfortable having up to $10, 000 worth of debt sitting on their credit card.
Credit Simple says it concerning that New Zealanders are becoming so comfortable with debt, not only because it attracts interest and, sometimes penalties, but it can also bring down your credit score.
Credit ratings are a key influencer in a bank’s decision to approve loans, such as for home loans.
Credit Simple advises Kiwis to pay off their credit card on time – and in full – each month.
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