News | Personal Finance
21 Jun 2021 13:12
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • News
  • Sport
  • Weather
  • Shopping
  • Jobs
  • Horoscopes
  • Lotto Results
  • Photo Gallery
  • Site Gallery
  • TVNow
  • Dating
  • SearchNZ
  • NZSearch
  • Crime.co.nz
  • RugbyLeague
  • Make Home
  • About NZCity
  • Contact NZCity
  • Your Privacy
  • Advertising
  • Login
  • Join for Free

  •   Home > News > Business > Features > Personal Finance

    Wise up to clear credit card debt

    While Kiwis’ attitudes towards consumer debt have become healthier in recent years, interest on credit cards is still costing some New Zealanders dearly.

    10 July 2011
    In total we pay around $650 million in interest on our credit cards each year. For a population our size that’s a big interest bill. Imagine how much better off we would be if that $650 million was in our own bank accounts, going towards achieving our own goals.

    The good news is that Kiwis are waking up to the fact that high interest consumer debt is dumb debt. Reserve Bank figures show consumer debt is declining and recent Nielsen research shows Kiwis’ attitudes towards debt have changed as well. The research found 56% of New Zealanders are less inclined to take on debt since the recession, and over the next 12 months 26% intend to change the way they manage their debt.

    But while our intentions are good – it’s clear we have a little way to go before our debt is under control.

    Credit cards can be a great way to pay if they are used wisely – that means paying them off in full within the interest-free period. One way to control this is to reduce the credit limit you have to one you can afford to pay back each month.

    While credit card statements show that only a minimum payment is required, don’t take this as the amount you should repay. The minimum may be as little as 2% of the outstanding balance so paying just this will mean interest rapidly adds up on the remaining balance. It grows quickly because the interest rate is high – around 18% on average.

    At the recent Financial Literacy Summit in Wellington, Retirement Commissioner Diana Crossan challenged financial institutions to include more information on credit card statements showing consumers how long it will take them to repay their credit card debt and the total interest they will be charged if they only pay the minimum due.

    Until lenders provide this information, it’s a good idea to wise up. Use the Credit card calculator on sorted.org.nz to see how different repayments can affect the total interest you pay and how long it takes to clear your credit card debt. Once you see the impact, you’ll see you’ll have more money to use as you wish if you pay your credit card off in full each month.

    © 2021 sorted.org.nz, NZCity


     Other Personal Finance News
     10 Sep: Spring clean your finances
     13 Aug: Plan ahead to give yourself a debt-free Christmas!
     07 May: Ways to prepare for the unexpected
     30 Mar: Time for a financial progress check
     10 Feb: Studying up on NZ Super
     10 Jan: Managing the back-to-school bills
     10 Dec: Stay in charge of your Christmas spending
     Top Stories

    RUGBY RUGBY
    A special moment for Blues loose forward Blake Gibson in his last match for the franchise More...


    BUSINESS BUSINESS
    An Auckland business leader is "astounded" at the lack of care for businesses devastated by the City Rail Link project More...



     Today's News

    Environment:
    UEFA drops investigation into Germany's Manuel Neuer wearing a rainbow armband for LGBTQ community 13:06

    Law and Order:
    A woman has pleaded guilty to serious driving charges - after causing the death of an Arrowtown teen almost a year ago  13:06

    Entertainment:
    'Dawson's Creek' writer Heidi Ferrer has died aged 50 following a 13-month battle with long COVID 12:59

    International:
    US Open final round live blog: Jon Rahm beats Louis Oosthuizen for first major at Torrey Pines 12:46

    Entertainment:
    James Corden has lost "just over 35lbs" - but he still hates going to the gym 12:29

    Cricket:
    The Black Caps are standing by their call to play five seamers in cricket's World Test Championship final 12:26

    Law and Order:
    A coronial inquest has begun into the death of a man crushed between a swing loader trailer and a shipping container in 2016 12:26

    General:
    Pre tournament favourite Jon Rahm has gone birdie birdie over the last two holes to win golf's US Open at Torrey Pines 12:16

    Politics:
    When the Spice Islands began to be forgotten, music became the Moluccans' last resort 12:16

    Entertainment:
    Kim Kardashian West thinks her 2007 sex tape helped to fuel the success of 'Keeping Up With the Kardashians' 11:59


     News Search






    Power Search


    © 2021 New Zealand City Ltd