2 Million Kiwis Crack Down On Their Credit Card Spending

News highlights:

• 2% of Kiwis have put their card in the freezer in a block of ice so they can’t use it
   
• Millennials are the most likely to be reining in their credit card spending
   
• How to reduce your credit card debt
• 24 January 2022, New Zealand – Kiwis are taking serious action to manage their credit card spending, according to new research by financial comparison site Finder. 

  The nationally representative survey of 1,507 respondents revealed more than half of Kiwis (55%) – equivalent to just over 2 million people – are taking steps to curb their credit card use.

  More than 1 in 5 (21%) have set a spending limit on their card, while 1 in 10 (10%) keep their credit card out of sight to avoid temptation.

  Other creative ways people are limiting the urge to splurge include unlinking their credit card from their phone (5%) and cutting up their card (5%), while 2% even admit to putting their card in the freezer in a block of ice.

  Angus Kidman, Finder’s editor-at-large in New Zealand, said some of these drastic measures may be amusing, however there’s more effective ways to manage your budget.

  “Hiding your credit card or even freezing it is a bit like chucking out all the treats in your house when you start a diet. It’s a short-term fix, but you’re still going to be tempted to buy more when you go to the shops.

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  “Try instead to take a long-term approach by thinking about how your credit card spending fits into your financial goals.

  “If you find yourself impulsively reaching for the plastic whenever you’re at the shops, it's time to start a budget.”

  Kidman encouraged Kiwis to consider the 50/30/20 rule with their money. 

  “This is where 50% of your income goes towards crucial bills such as rent and groceries, 30% is for ‘fun’ like new clothes and eating out, and the remaining 20% goes straight into your savings account.

  “You can also ask your bank to lower your credit limit. This removes the temptation to spend more than you can pay back at the end of the month.

  “Switching to a low-interest credit card is a clever move for those months where you might otherwise struggle to pay everything off.

  “Remember, credit cards can actually save you money by giving you points towards flights and groceries – as long as you pay off your balance at the end of every month.”

  As of October 2021, there was $2.9 billion in outstanding interest-bearing debt across the country – a 12% drop on the previous year.

  Finder’s research found 27% of Kiwis are not doing anything to manage their credit card spending, while a further 27% don’t have a credit card.

  Millennials (74%) are the most likely to be cracking down on their credit card spending, compared to 43% of Gen X.

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