Kiwis Embrace the Spirit of Giving This Christmas

MasterCard study reveals New Zealander’s spending intentions for this Christmas

Auckland, New Zealand – November 25, 2014 – Kiwis are embracing the spirit of giving this Christmas, with new figures revealing that a majority of us will be looking to purchase gifts for six or more people this festive season.

Commissioned by MasterCard, the study revealed that more than half of New Zealanders (54%) planned to be shopping for six or more friends and family this Christmas, whilst nearly 1 in 5 looked to buy gifts for more than 11 people. Women are set to be the biggest givers in terms of the number of stockings they’ll be filling, being more than twice as likely as men to purchase gifts for 11 or more people, and three times more likely to be on the hunt for more than 16.

In terms of gift buying, children are likely to take the biggest bite out of Christmas budgets, with parents expecting to spend an average of $140 on gifts for each of their kids - although a quarter of households plan to spend $200 or more.

Partners come in a close second in terms of priorities, with Kiwis planning to spend on average $136 on their significant others’ gift. Third are parents and in-laws at $80, followed by extended family ($65), siblings ($59) and friends ($52).

Overall, most Kiwis expected their Christmas expenses to cost more than $500, including around a quarter (24%) who expect to spend in excess of $1,000 on items such as gifts, food, travel and decorations.

Managing the Christmas spend

Whilst many Kiwis reported saving and buying gifts over the year in order to spread costs, the additional expense over the Christmas period was highlighted as a source of financial stress for nearly half of respondents – with a significant proportion (38%) relying heavily on their November and December paycheques and credit cards (33%) to see them through.

MasterCard New Zealand Country Manager Peter Chisnall says that it’s important for Kiwis to plan ahead and actively manage their finances ahead of the holidays, so that they can enjoy the season and worry less about money.

“With gifts to buy and family to visit and feed, Christmas can be the most financially stressful time of year for many. Whilst most of us will be doing our best to spend within our means, the reality is that expenditures often increase over this period, and having a clear strategy around how to manage your money can make a great difference.

“It’s great to see Kiwis are taking steps to reduce the impact of Christmas expenses on their finances. For a number of us, saving or spreading purchases throughout the year can go a long way to easing the pressure, however for others it could mean reducing the number of gifts purchased or decreasing the amount spent overall. The key thing is to have a budget and strategy that works for you and to stick to it,” says Chisnall

To help customers manage their financial pressures, MasterCard has developed a series of tips to help them manage their debt.

Top Tips for Reducing your Debt from MasterCard

1. Actively manage your money: It’s important to manage your money and funds available responsibly to build a better financial future:

• Set a monthly budget with incoming and outgoing spend and monitor your progress in order to keep within your limits

• Charges on credit cards should be paid back in a timely fashion to avoid interest charges on the remaining balance

• Always check your credit card statements carefully and on a regular basis in order to spot any irregular transactions as quickly as possible

• Using your payment card, whether it be prepaid, debit or credit card to pay for purchases and make payments will help you to keep track of all your spending in one location

• Make sure you update your personal details if you move address. This will help to prevent your financial information from falling into the wrong hands

2. Choose the right card payment product: There are many different types of payment card products available. Getting your finances in order and debt under control involves evaluating whether you are using the right payment card to suit your personal situation. If you need to utilise the convenience of a line of credit over the short term, you should look around for a Low Rate credit card instead. Interest rates for Low Rate credit cards typically start at around 13% and could save you unnecessarily paying a higher interest amount. Websites such as www.sorted.co.nz orwww.interest.co.nz, as well as MasterCard’s own website, provide useful tools to help you determine what product may be right for you.

3. Curb your spending: Freeze all unnecessary spending while you assess your debt and formulate a plan for getting on top of it. This will no doubt involve forgoing big-ticket items, reducing every day spending, or a combination of both.

4. Assess debt levels: Understanding how much debt you’ve accumulated is the first step towards reducing it. Determining your total amount of debt can be difficult, but it’s important to have the complete picture if you are going to overcome it.

5. Set a goal: Set a big goal, to pay off your entire debt over two years for example, then break it into a series of smaller goals which are achievable in the immediate term. If you are tackling debt as a family or couple, get everyone involved and look towards reaching the goal together.

6. Formulate a plan: Put the plan for reaching your goal down on paper. Set targets for monthly expenses, such as transport, utilities etc. Then try to spend less than your set targets. Make the difficult decisions about how to squeeze more of what you earn to reduce your overall debt, but always remember to leave some budget for unforeseen expenditure (e.g. replacing a car battery, calling in a plumber) so your plan doesn’t fall down on something unexpected.

7. Track spending: Keeping a spending diary online or in a journal will help you identify ways to reduce expenditures and allocate more money to paying off your debt where possible.

8. Monitor your debit and credit cards: Always check your card statements carefully and on a regular basis in order to spot any irregular transactions as quickly as possible. Using a MasterCard card can protect you from any nasty surprises as liability for an unauthorised charge is limited.

As a customer, you do have the responsibility to inform your financial institution if you become aware of or see an unauthorised transaction on your credit card, or if your card is lost and stolen. Policies do vary depending on the credit card issuer, so make sure you read the small print. However, most providers do offer some extra level of protection on purchases. For example, MasterCard Zero Liability policy protects against unauthorised transactions in store, over the phone and via the Internet*.

9. Pay more than the minimum: Charges on credit cards should be paid back in a timely fashion to avoid interest charges on the remaining balance. Paying more than the minimum repayment amount can be a critical first step in reaching your goal.

* More information on conditions and exclusions to MasterCard’s Zero Liability policy can be found at: http://www.mastercard.com/nz/personal/en/zeroliability/index.html

ENDS

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