Credit Cards Can Be a Worry For Kiwis
What a magical piece of plastic a credit card is, one swipe and whatever is sitting on the counter is yours. Not only that, but now you can buy things on the other side of the world in seconds – often feeling like you are not spending real money. It is an amazing, very convenient and accessible system but, unfortunately, it encourages spending without thought.
Unfortunately, this kind of unsecured loan is something that New Zealand as a country has bought into a lot, and if we aren’t careful, we could end up in a situation that would be very hard to come back from.
It’s important to remember that using a credit card is a form of borrowing where you buy now and pay later – so there are risks involved.
There also may be hidden costs attached to using credit cards – such as, for example, fees for late monthly payment or a missed payment; fees for ATM cash withdrawals and also potential penalties if you exceed your credit limit.
New Zealand’s credit card debt is bulging at $4.5 billion with $540 million in interest charged yearly at an average rate of 18.8%. For a country of 4.5 million people that number is massive and will only grow if we don’t become smarter with how we use our credit cards.
It isn’t all doom and gloom for credit cards, like I said before, they are magical things and can be used to your financial benefit if they are used in the right way.
If used right, a credit card can increase your credit score, earn you reward points and get you out of a jam, but they can do the opposite of that if you abuse them. It comes down to learning how to take advantage of the benefits a credit card can give you, while having the knowledge and control to not use it how it wasn’t intended.
If you don’t own a credit card, but you are looking for some extra money to tide you over until next pay, consider our NZ payday loan service.