Debt Dilemma: 41% Of Kiwis Have An Outstanding Credit Card Balance

News highlights:

• Those with plastic debt owe $3,776 on average
• 17% of Kiwis say their credit card bill is their leading cause of financial stress
• Finder awards New Zealand's best credit card brands

05 May 2021, New Zealand – Kiwis may be incompatible with their current credit card according to new research by Finder, a financial research and credit card comparison site in New Zealand.

A new, nationally representative Finder survey of 1,501 New Zealanders aged 18 above has revealed that around 41% of Kiwis are carrying credit card debt.

Those with plastic debt were found to owe around $3,776 on average, with 17% citing credit card repayments as their leading cause of financial stress.

A separate Finder Google poll of 1,002 New Zealanders aged 18 and above found that of those with credit card debt, the main reason they are yet to repay their balance is because they are bad at budgeting or have no savings to rely on (21%).

This is followed by needing to make a large one-off purchase (19%) and regularly giving in to impulse buying (16%).

Kevin McHugh, Finder’s publisher in New Zealand, said that finding the right credit card can make a big difference when managing debt.

“Credit cards can be a useful tool for budgeting provided you’re using a card with a competitive interest rate and low fees.

“Our research shows that a significant number of people are stressed about their credit card debt, which indicates that they may not have the best deal.

“If you are unsure where to start, Finder has done the hard yards for you with the inaugural Finder Credit Card Awards.

“Compare your current credit card provider against the winners to see how it stacks up – you could be in for major savings elsewhere,” McHugh said.

As part of the Finder Awards programme, Finder surveyed 1,126 Kiwi consumers to find out which brands delivered exceptional service and value.

The top 3 winning brands included American Express (4.23/5), ASB (3.94/5) and Kiwibank (3.94/5).

McHugh said that not all credit cards are created equal, so it pays to shop around.

“Interest rates vary significantly across credit cards, as do the rewards and features offered.

“Whether you are looking for the best airpoints deal or a low balance transfer offer, there is a card for you – but there is not one perfect card for everyone.

“Kiwis want to know they’ll receive good value for money and enjoy a range of perks and benefits when signing up for a card, and our awards seek to recognise the brands offering just that,” McHugh said.

For a full breakdown of the Finder Credit Card Awards, visit: https://www.finder.com/nz/finder-credit-card-awards-2021

Methodology

• * Credit card debt statistics exclude respondents with debt exceeding $50,000.
• The Finder survey is based on a nationally representative sample of 1,501 New Zealanders aged 18 and above, from January 2021.
• The Google Poll was based on a nationally representative sample of 1,002 respondents, 344 of which have credit card debt, from April 2021.

Awards methodology

• Brands included AA, AMI, State, Tower, BNZ, Trade Me, Vero and Westpac.
• Each product was ranked by its average overall score, with the winner chosen if it had a statistically significant lead to compensate for different sample sizes.
• Each metric was weighted as follows: Satisfaction (30%), Likelihood to Recommend (30%), Online Experience (20%) and Communication [Ease of Understanding Policy] (20%).
• Products with less than 30 responses were disqualified.

Tips for getting on top of your debt:
 

Prioritise your payments. Take the time to look at all the debts you owe and figure out which are the most pressing. This can make your repayments less stressful as you’ll know exactly what is due and when.
 

Consider a balance transfer. A balance transfer credit card allows your transfer some or all of your existing balance onto a new card to pay off over a period of 0% or low interest. This will save you money that would normally be going into interest payments.
 

Compare your current card. With so many cards on the market there’s a good chance that with a little research you’ll be able to find a better deal. Find out your current interest and see what else is out there, it’s also worth looking at cards offering rewards if you want a little something extra.

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