September 23, 2010
-
News: NZ Takes Aim At Credit Card Debt
Americans are not alone in their battle against credit card debt. New Zealanders have also taken aim at their debt and are sending a strong message to the credit card companies that they have had enough. According to the New Zealand credit reporting bureau, Veda Advantage, New Zealanders have significantly reduced card debt. The bureau's Managing Director, John Roberts said that cardholders want to get rid of debt and consolidate debt. Banks have reduced cardholder's credit limits while looking to generate earnings from other sources. Personal loans have grown in focus as well. Roberts believes that New Zealand citizens have had a historical change in their attitude toward credit card spending which marks a “radical change” in the card industry.
While the New Zealand economy has not recovered as expected, credit card companies have significantly reduced the number of card offers extended to consumers. The government reported that the economy grew less than 33 percent than analysts had estimated. At the same time, statistics also indicate that over the past three years, lenders have reduced credit inquires by over 30 percent. As of August 2009, credit card inquires had decreased by 24 percent. Most recently, it has been reported that number has improved by August 2010 to 11 percent. As the news about the lower than expected economic growth, the New Zealand's dollar, nicknamed the kiwi, fell to the biggest drop since September 16th. The drop spurred traders to cut their predictions for the interest-rate increases over the next 12 months.
Also contributing to New Zealand's struggles and sluggish economy is a 9 percent increase in credit defaults. As the credit card industry re-strategizes to offset high defaults and reduce risk by slashing credit offers, consumers have put their own plan into action. While reducing card debt has become a growing concern for New Zealand citizens, the economy which depends on consumer spending struggles to gain hold.