News | Personal Finance
25 Jan 2020 22:42
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • Days of Xmas
  • 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.

    © 2020 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 first half blitz from Michaela Blyde has propelled the Black Ferns sevens to a compelling 40-7 victory over England in their second pool match at the Hamilton world series event More...


    BUSINESS BUSINESS
    The Opposition's laying blame for the increasing rent prices across the country, squarely on the government More...



     Today's News

    Auckland:
    Auckland's North-Western Motorway near Massey is open again after being blocked earlier by a two-car collision 22:27

    Entertainment:
    Kim Kardashian West says a law career has been “in [her] soul for years” 21:30

    Law and Order:
    One person has serious injuries from an assault the Auckland suburb of Sandringham this evening 21:17

    Entertainment:
    Lupita Nyong’o feels “privileged” to have people who “look up” to her 21:00

    Basketball:
    Breakers forward Finn Delany believes they have a more than manageable task on their hands in the Australian basketball league tonight 20:37

    Entertainment:
    Kerry Katona has had several “dirty rotten teeth taken out” 20:30

    Entertainment:
    Kelly Clarkson has shown her support for Pink after the singer admitted she feels “weird” about ageing 20:00

    Entertainment:
    Courtney Stodden is “officially divorced” from Doug Hutchison 19:30

    Entertainment:
    Dax Shepard went on a "spectacular date" with Brad Pitt 19:00

    Dunedin:
    The search for a teenager missing off Dunedin's St Clair Beach has been suspended 18:57


     News Search






    Power Search


    © 2020 New Zealand City Ltd