Over 1 million Kiwis guilty of “credit card sin” in the past 12 months
Misuse of credit cards is rife in New Zealand, with over 40% of cardholders having committed a ‘credit card sin’ in the past year.
In a survey of 1,528 credit card holders by financial comparison site Finder, 42% admitted to having misused their card in the past 12 months.
Nationally, that equates to 1.1 million credit card holders using their card irresponsibly.
Almost one in five respondents (18 percent) said they used their card for an impulse purchase, while one in eight did not check their credit card statement.
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The study found that 8% of cardholders had made a late payment, while one in 10 had used up their credit card.
Paying only the minimum repayment, taking regular cash advances, paying fees for more than one card, and applying for credit cards they didn’t need completed the top eight credit card missteps.
Previous Finder research has shown that about 41% of Kiwis have credit card debt totaling $ 6.2 billion.
Angus Kidman, editor of Finder in New Zealand, said using credit cards wisely could save thousands of dollars in interest and fees.
On the other hand, poor card management could negatively impact the finances and credit score of users.
“The biggest risk is a bad credit score which can affect your chances of getting a loan in the future,” he said.
“Be intentional in using your card. While some reckless actions may only hurt you temporarily, others can be a huge burden.
Kidman said New Zealanders can take some basic steps to protect their credit score, including building an emergency fund to avoid maxing out a credit card for unforeseen expenses.
“Not paying the credit card bill on time results in a penalty and could end up in a debt trap, so set up direct debits to make your repayments,” he said.
“If you have debt, take a look at balance transfer offers – you can reduce the interest you pay and get out of debt faster. “