New Zealanders Changing Credit Card Habits

New Zealanders Changing Credit Card Habits

Auckland, 20th July 2005 – New Zealanders are changing they way they use their credit cards, controlling them and paying off debt more regularly, a new survey commissioned by MasterCard International shows.

The nationwide survey of 500 New Zealanders conducted by Colmar Brunton in May 2005 shows that credit card usage for day-to-day purchases and payment of regular bills has increased while there has been a drop in the proportion of credit card holders using their cards for emergency and large one-off purchases.

Bob Whiddon, senior vice president and country manager, New Zealand, MasterCard International says the survey findings are backed up by Reserve Bank data which demonstrate that more than 99% of what was charged to cards over the year was repaid in the same year or was sitting in the interest-free period.

“The Reserve Bank data shows that overall in the 12 months to April 2005, spending increased 10.5% (from $20.1 billion to $22.2 billion) however the true borrowing - or outstanding balances incurring interest – only went up by 6.9%.”

“The survey also demonstrates that across most types of purchases people made with their credit cards, the results were generally stable or declining slightly, except for day-to-day purchases and payment of regular bills, which increased across all age groups from 47% a year ago to 50% and 14% a year ago to 19% respectively,” said Mr Whiddon.

He says previously people have reserved their cards more for emergency purchases or booking and paying for travel, but this is changing.

“New Zealanders are becoming increasingly financially literate and realising credit cards are an extremely convenient way to pay for everything that matters – with the additional benefit of no EFTPOS fees.”

“The other advantages of paying bills with a credit card are the consolidation of all payments on one statement, making monthly budgeting less hassle; the potential to earn rewards points and have more personal security in their daily transactions,” he says.

Whiddon says the Reserve Bank figures show that New Zealanders’ credit card debt is 2.2% of total New Zealand debt – this compares with 2.3% a year ago.”

He describes the findings as a strong indication of the good money management abilities of the vast majority of New Zealanders.

ENDS

© Scoop Media