More than million card holders guilty of credit faux pas
Unwise use of credit cards is rife in New Zealand, with more than 40 per cent of card holders committing a ‘‘credit card sin’’ in the past year.
In a survey of 1528 credit card holders by Finder, a financial comparison website, 42 per cent admitted misusing their card in the past 12 months.
On a national scale, that’s the equivalent of 1.1 million credit card holders using their card irresponsibly.
Almost one in five (18 per cent) of those surveyed said they had used their card for an impulse buy, while one in eight didn’t check their credit card statement.
The research showed 8 per cent of card holders had made a late payment, while one in 10 had maxed out their credit card.
Only paying the minimum repayment, taking out regular cash advances, paying fees for more than one card and applying for credit cards they didn’t need rounded out the top eight credit card faux pas.
Previous research by Finder showed that about 41 per cent of New Zealanders were carrying credit card debt worth a total of $6.2 billion.
Angus Kidman, Finder’s editor in New Zealand, said using credit cards wisely could save thousands of dollars in interest and charges.
On the other hand, poor card management could have a negative impact on users’ finances as well as their credit score.
‘‘The biggest risk is a blemished credit score, which can impact your chances of getting a loan in the future,’’ Kidman said.
‘‘Be intentional with your card use. While some careless actions might only hurt you temporarily, others can be a huge burden.’’
Kidman said there were some basic measures New Zealanders could take to protect their credit score, including building an emergency fund to avoid maxing out a credit card if faced with an unexpected expense.
‘‘Failing to pay the credit card bill on time attracts a penalty and could end you up in a debt trap, so set up direct debits to make your repayments,’’ he said.
‘‘If you do have a debt, look into balance transfer offers.
‘‘You can cut the interest you’re paying and get out of debt faster.’’